America slides deeper into depression as Wall Street revels

You are correct that ARM's will be a nightmare for banks. They will cause major cities to loose even more value. Down in the south there are very few banks that were selling ARMS, EXCEPT in large metropolitan areas. In smaller towns, whose bankers are more conservative, will not place in jeopardy their local real-estate market with the promise of placing clients into houses they cannot afford. The larger banks don't have that community awareness and will sell mortgages to folks who really don't qualify or have a large downpayment. There is something to be said for bankers to not loan money unless they can afford to pay it back.

Tsk Tsk.....

Didn't realize that ALL of you British boys went to boarding school and snogged your roommates. Goodness, Ive never seen such pansies in my life.

Well Gentlemen, before you get too wrapped up in your schadenfreude I would suggest you read someone other than Ambrose - who, I can't believe, has finally run out of Vince Foster stories.

To quote Mark Twain, reports of our demise have been greatly exaggerated. Perhaps you can all join the American wingnuts and evangelicals on a cruise to, lets say, Somalia. Very little gov't intervention there. Actually, very little gov't - you'll love it.

Just a little hint - employment will slowly be rising in the US - it's already started. Contractors are the first to be called up - then full timers. However, you may stick with your prophecies of doom if you'd like. The bottom line is that the US has pulled you along for decades now....whats one more time between friends. Cheerio.

Shannah, then why is this the case: Hordes of Americans resent it when Canadians can name the 50 States of the US, but they cannot name the 10 provinces of Canada? As for tar paper shacks, I was employing poetic license. They
wanted more than what my uncle,
who is a retired highly respected welder, wound up with.

dave, your gripe about free trade does not stand up to the facts. The US is exporting more today to Canada, than it was before the Free Trade Agreement of 1988 was signed.

Jon Livesey, why then would the US expand its exports when it is being protectionist regarding what it imports from other countries. http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/01/10/the_old_delusion_of_protectionism/ sends your forecast back to the drawing board.

"The US basically has the same problem as Europe" Post 8.27pm 12 Jan.

Actually, no!

Listen to the voice of America expressed in these posts.

Vox populi, vox dei.

Hi George, Thomas, Ben

Well I'm just incandescent with rage that the American people became the most free and most prosperous people on the planet and threw it all away watching Fox News and buying made in China sneakers with lights in them on their credit cards. I guess they are gonna get what's coming to them......and it ain't gonna be pretty.

Hi Thomas and Ben!

George here.

Yup! Damn fools let the Republic get hijacked by the bankers. Thomas warned the people many times what would happen if they allowed the bankers to control the issuance of currency as interest bearing debt. And Ben made great speeches about preserving freedom and liberty.

And I sure did give those pesky Rothschilds and King George a kicking didn't I!

And the people threw it all away in just over 2oo years

Damn shame boys!

Best Wishes

George Washington

If it's a depression, it certainly lacks the drama of the 1930's. What we do have is a vast quantity of residential housing that is sitting empty and not generating any sort of positive cash flow. This is a problem many countries could live with. Until this dross is liquidated at sufficient discount and people start residing in this housing, the hysterics about asset quality will not cease.

I'm turning in my grave.

You bloody fools!

Hi Thomas

So am I!

We warned them didn't we!?

Dang!

All that stuff about keeping government small under control and look what they have done!

The politicians, who are complete idiots with regard to economic principles, will eagerly bankrupt the country as they purchase the votes of a dumbed down, ignorant electorate looking for a handout.

Watch closely now... This is what the fall of America looks like.

Shannah
on January 12, 2010
at 09:39 PM

"That is completely untrue, the vast majority of Americans have very little to no credit card deck."

Case closed.

America is absolutely f****d!

@Kilben

"You have not seem anything yet on housing. In fact if people, who are underwater on their homes, walk away enmasse then that will mark the true beginning of this depression "

I agree in part, but a point or question: There is no where to walk to. What do you do? Move back in with your parents or friends? Become homeless?

If markets tank and more jobs are lost then housing prices will plummet and we will be back in deflation heading downward into a liquidity trap. Japan is doing this now. The US government will have to put back into law a mortgage moratorium like they did two years or so too late in the 30s. That moratorium locks in toxic debts and pushes off payments for years.

Banks cannot survive this.

First, the Fed bond sales will fail and then there will be runs on the banks and then the government will stop withdrawal action on deposits and grab your money.

Maybe the next generation [or the one after] will learn something about debt and finance. The boomers are apparently clueless.

But, some people on the left still think we can spend our way out of this mess.

ryckki@gmail.com

jon livesey,

If the historically low Presidential approval numbers don't tell you anything, then you've had too much kool-aid.

Obama went from over 60% approval to a %44 in less than a year.

He promised transparency, Unity, and honest change in Washington. Instead Obama morphed into Superfreak Socialist Soros puppet.

It's ridiculous that in light of our failing economy, all Washington can focus on right now is a convoluted Health Care bill.

Maybe the 2010 elections will be an eye opener for you. De. Speaker of the House, Harry Reid is despised in his home state of Nevada. Families are worried about feeding their children, while Harry Reid can only think about cheering Obama.

They have all been a huge disspointment.

David H. -

First of all, you must have lived in the worst parts of the US, seeing all the trailer parks and section 8 housing-provided by the government for people on welfare. Most people live in suburbs owning their own homes(even if it takes 25-30 years) or nice apartments, which is a luxury compared to Europes renting society.

Second, if Americans are so stupid, then why do we have the best economy? Right now its not good, but thats because of all the elites in washington redistributing wealth to their cronies. Both Bush and Obama are guilty of this.

Although, I agree that there is too much credit card debt. My parents spent themselves into oblivion, and now they can barely afford to eat, even though they make $114,000+ a year together. Good news is, I leraned from their mistake. I have no credit cards, and I'm living stable.

“If history repeats itself, and the unexpected always happens, how incapable must man be of learning from experience” (George Bernard Shaw)
I guess,the great expert ever of the great depression (Mr Bernanke),should keep in mind this quote.
History,economy like life mean cycles.
Historical and businesses cycles.
The readjustment of the US economy will be much longer than that one occurred in the great depression.
During the great depression the debt peaked at around 240% of GDP and bottomed out at 50% in 1945.
It took about 15 years to get rid of most of the debt and to re-start a new long-term cycle from a lower level of debt.
This time the level of debt is much higher (300%) and therefore it will take more time.
Unless the process will be more painful.
If the debt-bubble had burst in 2000-2001 probably the readjustment would have been similar to the great depression.
But it was fuelled once again.

David-

That is completely untrue, the vast majority of Americans have very little to no credit card deck. I live in the Southern US and have seen NO shacks. You don't know what you're talking about.

We also have an above average IQ as a national average, and Americans are some of the best innovators and inventors of modern times. As the article said, EUROPE is much worse in terms of a recession. As always, we are the standard the world measures by.

Anyone who can't see that America has entered into a new revolutionary period is blind and in denial. The "elites" of the Atlantic world are just predators and have managed to kill off their own civilization in their lust for money and power. Yes, I am one of those people who saw it coming well ahead of time. I covered it all in a paper I wrote over a year ago now http://www.classicsoftware.com/signalspace/newcycle.htm

Another path could have been taken for America and was not. The center of world civilization has shifted from the Atlantic world to the Pacific. This has already happened as the geopolitical realities of copenhagen demonstrated very clearly. What is creditied with killing it is Nationalism which is one of the new priciples operating as explained in my paper. The World financial rule that has centered in the Atlantic world and the city of London since 1763/64 has come to an end. I know that many readers do not know what I mean by that but I am also sure that some readers of your column surely will. This is the state of affairs that everyone will have to adjust to. 2010 and 2011 are going to be a very traumatic geopolitical years for the Atlantic world.

I like the comment of history repeating itself in regards to empires rising up only to fall due to their own mistakes. I think alot of the comments on here are good but lack global unity as the goal. Not that it will ever happen, but all the comments seem to push towards the U.S. financial crisis affecting the world's financial picture. So in this situation it would seem the only real solution would be for the world to work as a team. And we all know that when a team has the right chemistry there is victory even if the star(U.S.) is injured. And maybe that is the real message that God is sending our beloved country. "Humble yourselves and appreciate & work with each other" To close I truly believe this world recession can end and we can be a part of it ending so long as we realize that creator is soverign over all of us. Anyone to prideful to realize this will meet the same fate as the past empires of this world have.
Sincerely,
Ryan

Most politicians are functional economic illiterates who will destroy the financial system in the name of "fairness." I read a book 12 years ago called A Distant Crossing that is the mirror image of what is happening today. That fiction novel has become reality, sadly so.

G.
on January 12, 2010
at 08:36 PM

Brilliant post.

America has been hijacked by the bankers and corporatists. They got their foot in the door in 1913 with the Federal Reserve act and never let go. It's taken them nearly a century to bankrupt America.

Ask the average American Joe though and they haven't a clue.

As George Carlin observed:

The owners of this country know the truth. It's called 'The American Dream' because you have to be asleep to believe it.

Economist,
Factually, I agree and you are correct. Far in the past be it Monarchs or Statists have always looked to the markets for revenue, and knew if you could manipulate them through rule, regulation, or "law" it would be for their gain.
The closest we came was slightly after founding the Republic, up to before Teddy. The Fed's wanted Western expansion, so they subsidized railroads, etc., to do so with "free" land (native americans didn't count). The West would have expanded in a free market, slowly, as entrepreneurs (farmers, miners, etc.) would have risked their capital (and lives) to make their own "life" as they saw fit. This wasn't in the Fed's best interest. As you note, the "Civil" war was about manipulation/tariffs of markets. My point of view was that era was about the closest we ever came to a free market capitalist system where producer and purchaser agreed to an exchange in a manner and medium agreed to by both parties as fair.
Most in the US don't understand the Great Depression in 21-23; where Harding didn't interfere, let banks/businesses fail, unemployment ballooned; he cut taxes and the size of the Fed Govt. and we recovered to lower unemployment than before that depression in about 18 months.
Banks, like any business if it is well managed, can survive and thrive. The "financial collapse" in late 2008, with Citi, JPMC, AIG, and the rest would have wiped them and their investors out. So what? How much more unemployment would we have had? There would have been many, not so foolish as to play the bubble/CDO/etc., game that would have picked the assets of the failed business and banks at bargain prices and started something new; or took a new concept to a failed business. Maybe there'd be some wealthy investors who would not be as wealthy, but they wouldn't be selling apples on street corners. If we are a capitalist nation, then you place your bets and work hard for a good outcome. Vegas doesn't give you your money back when you have a bad day at the tables. Government bailouts if viewed (and I don't share the point of view) as an action to assure welfare to all it's citizens, should have at least wiped out (fired- sent to Afghanistan) all the management of these institutions. I loved it when one of my poorer performing employees went and took a job at my competitor. A double bonus for me! I have room to hire more competency, and my competitor now gets hamstrung by half-stepper. Any institution is not a living thing; it's a collection of people, the management of which is entrusted to ensure the welfare of the enterprise, its owners, and its employees. The labor contract was broken decades ago. We as a country would be better today, if we just let it all go hell in 08-09. We'd be rebuilding now and there'd be plenty of banks willing to lend to entrepreneurs. After all, the entrepreneurs start up costs would be lower, with less taxes, less capital outlay for property,equipment, etc., because the much of the perversity of the system would have been destroyed.

My reply is simple………..let’s all prepare for the end…….it’s hopeless……everyone is lying…….the United States is worse off than everyone else, even Somalia.

I guess we should all build bunkers stocked with food, water and ammunition.

There are a lot of people who have missed the rebound in stocks and commodities…..they missed it because this was the doom and gloom they were selling all spring and summer of last year. THEY WERE WRONG…..and they were not invested in the rebound so they lost their butt plus the opportunity to recover a lot of it. So there are a large number of people who have only one hope for a second shot at capturing the gains they passed on while they declared armageddon in the spring and summer…….that is to talk the economy, the president, the federal reserve, and anything else they can think of DOWN…to drive the market DOWN……..so they can then jump back in on what they missed and that they know is going to be a very long and slow but steady recovery.

“Americans Fight Back”.... with 3 easy steps hurt Wall Street and the Big Banks...

First thing all Americans should do is--

#1. "Move Their Money".... out of the big banks and Wall Street brokerages (Goldman Sachs, Morgan Stanley, JP Morgan, BA, Citi bank, Wells Fargo etc.) into "local" banks, savings & loans, credit unions and brokerage accounts. Also, you can take it one step further... refinance and/or move your credit cards, home mortgage, personal and/or car loans. If taken seriously this could place a heap of hurt on big banks, Wall Street and US Government.

#2. Then Email, call and tell your many friends about the "Move Your Money" plan and its web site at http://moveyourmoney.info

#3. Next thing Americans should do is organize protests... with a new twist. We need to make the protests personal by taking them to Wall Street investment and/or big bank CEO's, VP's and government officials "homes, churches and country club" etc. .... and their "adult kids & grandkids homes, colleges, schools and churches." The Elites have made it personal by destroying American work places, wages and families.

So it's time to fight back.... make it up close.... and "Real Personal."

During every crisis there is always an individual or group that looks for signs and portents. The chicken littles are all over the internet and tv/radio air all proclaiming the sky is falling and great doom is upon us. The reality is, the world will adapt to these new conditions and things will return to normal after a brief period of adjustment.

Just like after every other financial crisis (Savings & Loan in the 80s, Asian Currency Crisis of the 90s, etc etc).

Ambrose- Another excellent article and I quote my British mother when I say "Spot On." It seems you British know more about America's problems then we Americans do.

However, I might know why my fellow Americans seem so blind to the obvious political & economic realities stated in your excellent column. It seems Americans like "vegetating" while the Elites chosen US Government officials, media moguls and pundits lead us down the garden path and pick our pockets. You see Americans "were" so obsessed with self gratification and acquiring more toys they couldn't think outside of the "media generated box" they live in and do not understand the simple concept of logic based thought.

This lack of critical thinking, call it Blind Ignorance, is the American way to avoid truths that hurt and if believed won't allow "their political side" to win. It's much easier for them to believe political & Wall Street lies, phony government statistics, propaganda in TV commercials, media whores, and bully pulpit prolife preachers, radical Neoconservatives or the neighbors email as it just takes a few minutes to grasp a deceitful point of view... and then promote it. It's troublesome to look for truths, read, study, ask questions and "think." Logic based thought processes are foreign to these people as they've been dumb down by the Elite controlled US media.

Unfortunately all Americans, the British and rest of the World have paid a heck of a price for those Americans too lazy to do their homework... that helped elect Bush... "Twice" and who lay blame for the poor performance of the American Economy on Obama's 11 month stint in office. They won't acknowledge that during 8 years of Bush's Neoconservative Republican reign Americans sacrificed many Freedoms and their Democracy as the Bush Administration brought America "Corporatism" and the World a "derivative" generated Depression. For those Americans whom continue to remain blindly ignorant of all truths it should be noted Corporatism started in America when Bush allowed the Neoconservative & Elites, "Goldman Sachs," banks, investment banks and other corporations to run the US Government. The current Bush created Depression has changed the economies dynamics as retail purchases continue their decline... along with jobs, house prices, wages, benefits and Americans trust in their government. It seems 17.4% of Americans have been left on the side of the road holding the empty bag.

It should be noted that Wall Street and its "derivatives" are nothing more than gambling. Wall Street is a giant Casino with government sanctioned gaming and commodity trading that recapitalizes the big banks at the expense of average Americans. It's rigged so the house (Goldman Sachs, JP Morgan, Citigroup, Wells Fargo etc.) always wins. The scary thing is... both the American and European economies are based upon this same phony gaming scheme. That extorts money from citizens of the World via gross lies about markets, stocks, derivatives, bank profits & capital, business growth & profits and World GDP's.

Wall Street and the Worlds big banks should be allowed to fail... as failure is a learning experience that won't soon be forgotten. The executives at Goldman Sachs, JP Morgan, Citigroup, Wells Fargo and other World Banks should be allowed to join Americans lucky enough to have Medicaid, the unemployed at food banks, soup kitchens, food stamp lines and shelters for the homeless. Let former Wall Street Executives join their fellow unemployed Americans as they shop for the new health insurance with empty pockets and broken souls.

Solutions; Obama during his campaign “promised” Americans single payer health insurance... where is it? Where are the work programs? Obama needs to clean house starting with corporatists such as Geithner, Summers, Robert Rubin, son Jamie Rubin & his hires, Bernanke and many other individuals. Paul Volker should be brought in to clean up this mess as his track record is impeccable and clearly indicates where his loyalties lie. Obama should bring in people that have no ties to Wall Street Casino's or the "big" banks. Obama needs to stand tall and prosecute Bush & Cheney Administration for war crimes, lies, questionable military contracts, miss appropriated and misplaced funds. The clock is ticking and Obama must act soon as Americans are growing restless.

This World Depression will end when the American rebellion starts. When "real" Americans have the gonads to do what's right. To "think" and fight for freedoms politically as their forefathers did. To take control of "their" Government from the Neoconservatives and Elites who trashed the American Constitution, Bill of Rights, Democracy and while doing so... destroyed the economy of the World.

Some true patriots will remember this line... "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

So I ask... "Where have all the real Americans gone?"

John Wayne... the "Duke"... where are you when America needs you?

"Reading all these 'comments' is a true barometer of the anger and frustration of the American people."

I really don't think so. What you are seeing here is nothing more than an artifact of the Internet. A story like this one from AEP only needs to be cross-posted to a few "tea-bagger" and other web-sites for crazies, and the sky will fall in in the comments.

The give-away here is the type of comment we are seeing. It happens that the financial crisis has awarded a bit of limelight to folks like Ron Paul, who represent what you could call the Austrian view of things.

Ron Paul himself is a pretty reasonable guy; the trouble is that he has too many fans of the "buy gold and bullets and draw the wagons up in a circle" type. These idiots are always waiting in the wings, so giving them a link to here is like throwing fresh meat into the bear pit.

I think we all know what is really going to happen. things will remain ugly through 2010, unemployment will stay high, we likely get another banking crisis, but eventually the bad assets do get recognized and balance sheets recover some health, and with a weaker Dollar the US begins to export more. Then unemployment starts to fall.

The US basically has the same problem as Europe; it has an overpaid population who are short of skills, so it can't compete with China. Ultimately, everything else we see is a consequence of that. The advantage the US has is labour flexibility and good quality immigration.

About $9 trillions has been shoveled into the banks from the US treasury by way of bailouts, stimulus or hidden fed maneuvers. If that money had been sent to US citizens it would have been about $30,000 for every person in the country. If you wanted to help the economy it would be better to give the money to the people who would spend it and actually be helped by the bailout. Rather our corrupt government gave the bailout to the unethical, unpatriotic bankers who used that money for their bonuses. That money should have gone somewhere where it would have helped people. Bankers took the bailout and are hiding their catastrophic loses from their outlandish risks by hoarding the bailout money instead of lending. Throw the bankers in jail. They are our era's Marie Antoinettes.

Edward @ 5:26 pm

We lived in the US for 5 years and in many ways it was an eye opening experience.

Millions of Americans live in trailer parks or wooden shacks or housing projects. Most of them have maxed out credit cards with debt of $50,000+ never to be paid back as personal bankruptcy procedure is a joke there.

Not to mention the inferior education system and the average American IQ with their non-existent knowledge on any topics. The truth is that the average American is dim and has been living beyond his means on borrowed time for far too long.

Something else to think about. These various lending institutions, insurance companies, and the banking industry in general. JP Morgan Chase, Goldman Sachs, Citibank, AIG, General Motors to name a few are nothing more than corporations.

Source: "The Devils Dictionary" by Ambrose Bierce:

Corporation,n
An ingenious device for obtaining individual profit without individual responsibility.

nuff said

For everyone blaming Obama, let's not forget the blunders of previous administrations (both parties). Instead of finger pointing and listening to people who would have sold their soul to become president, let's use a little bit of logic. In a sense, we're all to blame. We elected the officials that basically gave us what we thought we wanted at the time. We like our $99 color televisions and inexpensive clothing. We like to strut around like we're the bad asses of the world (granted, sometimes it's necessary because other countries won't), we don't want to implement a draft so we pay very expensive contractors to help fight wars, etc. Great, but all of this comes at a price. Loss of the manufacturing sector, tremendous amounts of money spent on defense, no bid contracts and sweetheart deals that cost taxpayers ridiculous sums of money, and so on. Have we had a wake up call? Yep, but it doesn't appear that too many people care to listen to the alarm bells. There's no quick fix solution and believe it or not, neither political party has the exclusive rights to a pill that's going to fix our problems. Instead of politicizing every iota of information in an effort to get re elected and gain a majority of party seats, it would be nice if our elected officials worked together in an effort to dig us out of this hole.

It is Obama's fault. In October of 2008 smart money and big money realized that Obama the committed Marxist was going to win. They pulled it out in advance of the election to preserve their capital. 2012 will see the investment return and the US economy roaring back to life.

Hey Cold Realist,

Just a quick bite of reality for you, it was Reagan who got the ball rolling with free trade that helped fuel the demise of manufacturing in the states.

Congratulations, America! You are getting the hope and change Obama promised!

Hope...that we will have the strength, will and courage to pick up what's left of this country after the SHTF in a few months.

And change... oh, so much change! More job losses, more foreclosures, more homeless people living in your back alley, less money in your pocket that will buy more expensive bread, etc.

Truly great change! Not necessarily GOOD change, but hey didn't you want change?

So cheer up! Obama is doing exactly what you wanted! AND a lot of things you didn't!

Now don't you feel all warm and cozy inside?

"It's the end of the world as we know it....and I feel fine"

Frantic efforts by the Obama administration-Riiiiiiggghhht!

+-Frank L said it very well, but I would like to take it a step further. No, the current economic condition cannot be placed on any one person. President Obama did not cause our current economic condition; he did however perpetuate it along with President Bush with the TARP money paid out to rescue the various lending institutions, insurance companies, and the banking industry in general. JP Morgan Chase, Goldman Sachs, Citibank, AIG to name a few. These companies made a fortune on the low interest TARP money, did nothing to help the economy, and raised their fees and rates to boot, a slap in the taxpayers face, to improve their bottom line. Now they are shelling out millions of dollars to their top “performers”.
Dillon Radigan said it best on The Today Show in an interview. “They did not make money despite the bailout but because of the bailout”. These same institutions are comparing the bonuses to the salaries of professional athletes. Basically, one must reward the players or lose them to the competition. In a nutshell, Mr. Dillon said “Anyone can play basketball but there can only be one Michael Jordan. Bankers have free access to the Governments money, the Federal, the Treasury, to the custody of the taxpayers’ money”.
This system needs to be restructured before it can be fixed. This ability to “gamble” with said money is the underlying cause to the current economic demise. It can be likened to going into a parlor and gamble with $100,000 dollars a hand. If the bank wins they keep the money, if they lose the taxpayers take the downside. This is what needs to change.
Now I will address the TARP money on its own merits. The Government can give these institutions all the money in the world; individuals can’t afford to splurge on anything as they may not have a job next week, much less next month. A strong economy is one that allows the people of said country the ability to spend, period, end of story. Any Economics Major will tell you this is the foundation, the ground floor. One cannot simply build a house on a gravel bed and expect it to stand on its own.
I’ve said it before and I will say it again, although it may not have been or be the right solution either. At this point there is no cure. I believe the domino effect will win in the end and we lose.
Katrina once again proved you cannot trust people with free money. No explanation necessary. The TARP money would have better served the people of The United States of America; had it been given to the people in the form of a credit with but one purpose. If you filed a claim and paid your taxes every year for the last 5 years you get a CREDIT worth, let’s say $200,000 dollars per person or married couple, whatever the case may be. This credit can ONLY be spent on paying off your current mortgage or the purchase of a personal dwelling saving millions of people their homes. The obvious question is: What else would this do? The answer is simple. We just saved the banking, lending, insurance companies of the United States over night. They got their money back, less interest of course. Hence they got paid anyway for their gambling debauchery. You no longer have that 900 to 1200 dollar house payment every month to deal with. This in turns frees up said money to splurge as one sees fit. You can now go buy that new car or boat or whatever. We have, collectively, saved the automotive industry for instance. My point is that this would have put money back where it needs to be, into the economy and we have preserved our way of life.
The TARP money was not the Governments money to do with what they please per se’. The actual events that have occurred are simple to see. Our illustrious Government, which we voted for, gave rich people the money we entrusted to them thru taxation. Yes, it is and or was our money not theirs. The TARP monies only served the greater good of the people who did not need it to begin with, period, end of story.

To Priam,

While I agree that the government and its subsequent monetary policy has caused a large deal of harm dating back since its inception, letting the banks fail is disastrous. Efficient allocation of capital is the pulse of the economy. People are quick to burn the banks but without it (I am going to lump venture capitalists into this as a financial intermediary) start ups are virtually impossible and growth is very difficult. It's not a coincidence that underdeveloped nations have poor property rights and an underdeveloped financial system.

There are a number of reasons for the sub prime crisis. Many economic camps have a variety of theories. From your critique I will assume you are Austrian in nature.

To MarcAnthony,

There has never been a free market in the literal sense. Pre-Roosevelt there were tariffs sky high (it started the civil war). You can hardly call that a free market.

Nothing new about what's going on. People make errors and in a well functioning system they are allowed to suffer the consequences. (failure) In the US we have papered over our problems for decades and come to believe we can have the benefits of a market economy without the failures that clean it out. Now it's time for a house cleaning (economic and then likely political)Fun to watch and easy to profit from. Just trade against whatever the US Goverment does.

Wow the stock markets overvalued, housing is going to be hit by foreclosures from people who lost their jobs and saving accounts and bonds are paying less the 1% interest. How am I suppose to save for retirement when their is really no good place to invest money?

Peter. Have a good sleep. You will feel better in the morning

Humorous and Sad postings.
History does repeat, but you have to find and read real history and avoid the propaganda.
No one alive today has ever experienced a free market or free market capitalism. It began under Teddy R and disappeared around the end of Hardings presidency in the US.
Under Wilson and since, the US has become an Empire. All empires end. Ottoman, France, Spain, GB, USSR, Rome, go as far back as you like. They all fail, and underpinning all of the failures as a tell tale sign is fiat money/debased currency (when we used coins of gold/silver).
The US as an empire is ending now. It's a painful process for those under it's rule/influence, a joyful one outside the same. History doesn't tell you how long they take to crumble, but crumble they do. The USSR was about 70 years; the Ottoman almost 800. The US as an empire, looks like it will be about 100. Stay healthy, protect yourself, your loved ones, and your personal/individual freedom as there is much turmoil when empires fail. How is up to you. Don't be a victim, be a survivor. Every US President since Harding has been part of the problem. Obama's just the last one or possibly next to the last one. None of them want to be in the job when the world recognizes the empire has fallen. Ask Nero!

Once again we have seen the repeated failure of America and the insight and planning of Europe. Europe has proven its superiority in both its economic prowess, its ability to deliver jobs, its handling of the economy and its rightful place as the true leader of the world. Americans are mired in continued missteps that have dogged that backwater land for generations. Their inability to embrace socialism and market planning, their warlike infantilism and inability to comprehend complex economic models have doomed them to oblivion a mere speck in the world's history, while Europe will continue to lead the way as they have always done and will always continue to do. Long-live the EU.

"the depression is now beginning !
youtube.com/goldieshome"

Dead right, Rich.
Go to that link, listening to that man strumming and singing and you want to hang yourself.

Carolyne Hardwick. The degradation of our society by financial persons began a long time ago and is now only reaching a climax. I'm old enough to remember when the financial persons started to be promoted to senior positions in industry, back in the 60's and even then "real" people could see it as a disastrous move. Financial people should only be used for there input to the economic running of a company / country, but to put them in charge, jesus, what a disaster. There is no group of people on earth less able to run anything, than financial people. They are driven by money, the balance sheet, profit, etc. They do not give a single toss for humanity. The banks now are interested in nothing more than how to make money from human beings. That's the reason for their existence. We all merely suffer from allowing one specially educated group of people in our society to rip us off. This goes for government, Inland Revenue, Banks, Insurance, etc, etc, etc, they are all driven by greed. I have a belief that the "global" powers who are driving them will also come a cropper. They believe that "big" is good. I don't think so. In my life i've never seen that. Normal people should go back to the old basics. Look after yourself, never trust anyone who deals with finance, never trust anybody in government, recognise that financial organisations just want your money. They don't care about you in the slightest. Then maybe you'll be OK. Unless, the governments, whoc we elect into power, find other ways to crucify us. I love the saying "there's nought stranger than folk" especially "folk" who have been elected into a position of power. Then they become aliens to our society.

@G

Outstanding comments and I agree. The Duke is still among us but will only surface if things become progressively worse.

Sooner or later the government will move toward seizing bank deposits or our 401(k)s [especially the Roths that are nontaxable to eternity or beyond in government terms] and try to fold them in with their social programs. They will have no source of capital other than that.

The tipping point should be when the Fed fails to attract sufficient buyers in some upcoming bond sale and then the howling and printing of money begins. Instant tax hikes should resort in a tax revolt or other measures as nobody wants to give up their homes to some person who adores Mao or Hugo Chavez.

Civil disobedience mechanisms are already spread around in the 1960s to 1970s court case laws so there is little they can legally do to stop protests and boycotts.

Like the Sept 2007 financial crisis these things approach quickly and the government has little time to prepare for anything but the 2010 election.

Many of us will not like giving up our homes and wealth to liberals.

rycK ryckki@gmail.com

This one is easy. Just blame it on Bush.

Some basics are needed. Money is simply a means to transfer property. For instance, a pig and a gallon of beer for so much wheat. It makes it simpler to have money, instead of the barter system.

Now, what we have is more dollars in circulation.

Am I wrong?

Ambrose:

Your observations are sound and we can hardly quibble with your predictions either.

The new book book "This Time is Different: Eight Centuries of Financial Folly" by Carmen M. Reinhart and Kenneth Rogoff should be read with intensity as it clearly builds up the cases for the basis for a major banking crisis of this sort. It also shows that the recovery times may well extend to 6 years or more.

Nobody wants to think about deflation, except perhaps you and some enlightened others, but the evidence is there. We throw some 10 trillions of off-balance sheet Fed monies into the pot and our M2 only grows from 8 to 8.4?? M3 is deliberatly not reported now probably for political reasons.

It is also unclear how we can have an equity 'recovery' when revenues are largely flat and corporations are boosting the balance sheet bottom line by cutting middle lines. The Obama administration can only think about new burdensome taxes to hit corps with and they have nothing positive to give small businesses who generate 70% or the jobs in the US. Small businesses cannot construct a reasonable 1,2 or 5 year plan at this point so why hire? The Obama types may now look to Hugo Chavez for insights as he is popular.

With corporate cost cutting maximized and synthetic PE ratios in indexes, we can look forward to a second stock market 'dip'and also worry how the government will decide to debase our currency.

They will find a way.

ryckki@gmail.com

This whole problem has a lot to do with Wall Street greed aided and abetted by an agenda-driven Congress that wanted a 'home in every pot', regardless of whether one could afford it. Fannie Mae and Freddie Mae were government created enablers that facilitated these no money-down, low interest rate, no documentation loans which Wall Street ultimately peddled as collateralized junk. Pushback from certain Republicans in Congress collapsed once the race card was pulled out. While markets should be checked, government direction of free markets--particularly agenda driven direction--never ends up well. Another form of the wealth transfer that "the One " is pushing through at break neck speed.

How we forget:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." -Thomas Jefferson

"The problem with socialism is that eventually you run out of other people's money.--Margaret Thatcher

You have not seem anything yet on housing. In fact if people, who are underwater on their homes, walk away enmasse then that will mark the true beginning of this depression

If Morgan Stanley can walk away from its property, SO CAN YOU.

"WALK AWAY IF YOU CAN! WALK AWAY WHILE YOU CAN!!"

Ambrose states that the banks were in good health in 2004; no they weren't. They were in the process of building up bad debt and most of the "profit" etc was bogus as we have all found out in the last year or so. People thought they were OK because few scrutinised them carefully enough to know otherwise; after all who thought that bankers, lords of the world, would be so short sighted and corrupt as to publish "profits" on such crass deals and loans and claim everything was alright. They must have known what they were doing would cause the banks to fail eventually but they all must have also thought they would milk it for as much as they could whilst they could. Either that or they all felt that to go against the grain would cost them their job, either way; whatever they did was selfish and spineless.

Simply put; this recession we feel now is due to the bogus "good years". There hasn't been any real growth worthy the name in the last decade. Note he other headlines regarding things like the continued decline in manufacturing in this country.

Apparently America finds it impossible to make passenger cars at a profit unlike Germany and Japan.
Thats very worrying because America is not Britain (third-rate management)....or is it?
If GM-OPEL fails again...time to shutdown ALL mfg in NA and transfer everything to CHINA?

Glad I got a fed job when I did.

Jason the Fed

No, China is not the new "it". Look what happened to Dubai. That country had plenty of promise and bling to show for it. Dubai collapsed. I've been to both China and India. The populations are dirt poor, and also have that Disneyesque feel of fakeness, that Dubai had.

I was in Malaysia in December. They try hard to portray the entire Asian region as the next great hope from the moment you step on the plane. They say that their populations will replace the consumers of the Western world.

Yes they have huge populations, but they won't come close to even the US, anytime soon.

Yesterday, 9 Catholic churches were burned down by Muslims in Kuala Limpur. The Petronas towers stand in the midst of tribal cultures, and strict government control. The only exception is Singapore, which is practically the size of Monaco.

In my native country we have a saying, "when the US gets a cold, we get the flu."

As goes the US, so goes the rest of the world.

LDC
on January 12, 2010
at 03:00 PM

"Where are all you Obama kool-aide drinkers now?"

GO ON LDC, DO Explain how the SH*T that hit the fan before the man got into the office is entirely his fault???

GO ON!!!

Personally, I wouldn't p*ss on any politician if he/she were burning BUT it's the propaganda behind such statements as yours that shows WHY the human race still has a long way to go!!!

EVERY GOVT. Spent to shore up there economies. They ALL Printed money. If they didn't, the likes of most of the commenters on HERE would verbally crucify them for not doing jack sh*t.

So, we've got a horrendous problem with the size of the national debt, unemployment, and declining GDP growth. So what does our leadership (100% democrat) do? They embark on a spending binge with an unprecedented new entitlement program that ALL analysts agree with explode the national debt in 10-15 years. How's that for responsible government? The key to recovery is robust GDP growth and the ONLY way you get that is through cutting marginal tax rates and deregulation. Sure, there's risk, but the up-side far outweighs the possible down-side. But it won't happen with this president/congress. Know what a Leftist is? It's someone who lives in constant fear that someone, somewhere, might be getting rich.

To an economist:

Your analysis is overly simplistic.

The problem came because our absurd monetary system has allowed the creation of far more paper claims on wealth - promises if you like - than exists the underlying wealth to fulfil them.

Yes, you have identified a couple of symptoms of the problem, and you have noted that historically crises have often come about as a result of the disparity between promises and reality being resolved through widespread bank failure.

However, averting bank afilure by massive bailouts, not only destroys the savings of those who must shoulder the costs, it of course increases the moral hazard you already identified as a problem.

In addition, creating further promises in order to prop up institutions with a proven track record of destroying real wealth (after all that is what leads to bankruptcy), further exacerbates the disparity between promises and actual wealth.

This disparity must be resolved one way or another, and if it is not resolved through deflation, then it will be resolved through inflation. And inflation is just as damaging as deflation.

The scale of the problem is defined by the size of the disparity between promises and the ability to fulfil them because that determines the size of the economic dislocation required to resolve it. Allowing this disparity to further increase is not "averting" anything.

Priam.

So, put down your conservative and liberal blogs, pick up a book on the workings of financial market, and try to use a recession to gain a profit (and you 100% can).

Where are all you Obama kool-aide drinkers now?

Free people who are allowed to freely invest however they see fit is better than a bureacrat/politician stealing your money and then spending it however he/she see's fit. Asia has a shot at the prize as long as they remember the value of freedom and it's impact on releasing the unbridled energy of those that have the desire and willingness to achieve. Couple that with honor and integrity and the world beats a path to your door. The fundamental difference between the U.S. and the rest of the world is the freedom to dream and achieve and keep the fruits of our labor without asking permission from the State. If we're headed into the abyss it's because we no longer aspire to freedom, responsibility, honor and integrity. However many times I get told I'm old fashioned I insist on holding myself and those around me to those standards.

The fellows predicting "armed revolution" in America w/in 2 years...I don't see it. Real Revolutions have real lines in the sand. What is more likely is a period of anarchy (a la France 1789-Rise of Napolean) as services are stripped away and municipalities, utilities and States default. But we do have a lot of guns in the right and wrong hands, our politicians are wholly owned and sponsored by entities with agendas antithetical to the general interests of the People,and somethin's gotta give.

The difference between a good writer and a great one is the ability to explain down the complex. Since even this average joe was able to get your entire point, from start to finish, you did a capital job.

Jim M.
Warwick NY

the recession is finally over, the depression is now beginning !
youtube.com/goldieshome

Well, history repeats itself!

End of Pacs Americana,
beginning of ???

Whatever you call it, it seems that "it" is in Asia.

Interesting column. I now believe that now is the time for Universal service. No exceptions. Funded by the remainder of the stimulous funds.

As some say, Armaggedon has been prophesied several times for a while, and reminds me of "the wolf and the liar shepherd" tale (the boy who cried 'wolf'). Some day, it will arrive and blessed be the ones prepared for it.

As far as the crisis is concerned, I happen to live in a country, and my fellow citizens have catapulted to the top of the pyramid a truly incompetent, ignorant, evil, resentful Prime Minister, so pleased to have made his own acquaintance that it gives me the chills every time I see him. As we say around here, "he speaks, and the bread rises". He is now the new President of the EU, and he thinks it is something more than just a plain formality; in fact, he thinks he has the right to give lessons on Economy... better leave it there.

My homeland country has no resources (not even WATER!, nor to mention oil), and we have no manufacturing sites, no R+D investment, no value added activities... we do have inflated home prices, amazing unemployment, shameful education. On the other hand, sun & fiesta, lots o'them. No wonder the Germans, French, and the rest of the EU look at us as if we had aggresive cholera. I would.

The US can always close borders, refuse to pay debt, point their WMD (they sure have them) against the rest of the world, and survive (they are not a country, they ARE a WHOLE continent, with natural resources). That will be Armageddon.

if we are headed to a greater shrinkage of the economy and greater government intervention, then what next? ww3? was khrushchev correct back in 1963? future kind of bleak.

Everyone blames someone for this mess. What everyone should do is look within prior to putting blame in another.
I am an old man who has watched this nation eat itself for the past 50 years. I have been on both sides of the work force. There is a golden rule which never changes no matter how you shake it, twist it nor what perspective you have on it. "A people cannot make the highest wage, have the best health care insurance in the world, always run a personal deficit and purchase products made in another country where the wage is 2 to 3 dollars a day. Even the product they make themselves.
If you remember the term 'sucking sound', it has been going on for at least 40 years and is almost over, as there is no more water in the tank. Buckle down America, you remember the term,'The best is to come'. Well you can now say, 'The worst is on the horizon'and it ain't gonna be good.

fk, of 6:37, jan 12
excellent comment
the sooner that humanity wakes up to these ancient demons, the better

"You cannot force a New Dollar or debt default if you are not prepared or able to back up the move"

I'm not sure what you mean by "force" a debt default.
It's a passive event.
You simply don't repay it.
It is then for the creditors to take whatever action they can.
Should America go down this road I don't imagine for a moment that any country, including China, would go to war to make them pay up.
Do you, D.Rumsfeld?
I believe China would suck it up and continue supplying America, or face the prospect of colossal unemployment when US demand for their factories' output dries up.

Jim -
You DID get the change you voted for. You no longer have a decent job and you cannot pay your mortgage.

The mistake people are making here is thinking that plutocrats are cronies of government. The relationship is very much the other way round, which has a lot to do with why we're all in the cart.

Yawn.
This movie is almost over. Enjoy the popcorn and Prozac.

Charles Lee
on January 12, 2010
at 10:48 AM

It is you who do not get it! You cannot force a New Dollar or debt default if you are not prepared or able to back up the move. Can you not understand that! Your analysis and conclusion is simplistic in the extreme. I simply question it based on research. The fact that you refuse to research the matter tells us volumns.

By the way often a 'child' does not listen or learn as they want to believe in a fantasy as it suits their arguement. I am willing to have my view coutered by your research. Also, if you studied history you would see that there are countless military powers which have been proven less formidable when push comes to shove, sometimes due to political will, military leadership or other factors. I would say research it but I won't as I know that you will not.

Anyway, enough written. Good luck in your ivory tower.

To: +-Frank L

That is absolutely spot on!!!

Great Post. However I doubt that the people who should read it will. And if they do take notice they will only try and slaughter you with unflattering comments about how crap you are and how great they are. It's like 1984, US style. The workers keep believing the pigs in the farm house.

Charles Lee asks, "...Who would not want to get their hands on the New Dollar?
Who would not want to trade with New America? ..."
Well America would still have the same problems of spending more then they earn and would soon run up debts again. Most of the debts have been run up in the last few years. Having reneged on their debts why shouldn't they do so again?

I am really tired of the general lack of knowledge stemming from the public. The crisis came from a combination of government intervention (causing moral hazard) and a financial innovation (sub-prime securities) playing on the basic principal-agent problem. The broker didn't care if the loaner could pay; the mortgage would be packaged and sold off to someone else in a security. While freddie and fannie both fueled the fire, other banks did follow the risky business path too. So yes, this crisis both stems from, lack of regulation, and over intervention.

People really need to get over bailing out 'wall street' over 'main street'. A massive bank failure would have been catastrophic. Without a financial system there is hardly an economy. Financial institutions are VITAL and hard to start up. They solve the number one lending problem, adverse selection. Similar to the used car lemon problem.

Almost every DEPRESSION begins with a financial market collapse. That collapse was averted. Appropriate funds with be allocated through efficient means. The good and bad companies will be sorted out. And the economy will rebound. All this talk of a depression is unfounded paranoia.

So, put down your conservative and liberal blogs, pick up a book on the workings of financial market, and try to use a recession to gain a profit (and you 100% can).

Ron Paul for President

Recently Yemen has been given 150 million dollars AID to buy American WMD and fight the "terrorists"...thats the opposition groups to the despot that runs Yemen with his family in sole custody.
So America supports another tinpot dictator and then realises 10 years later that they have created another monster...shades of Saddam Hussein shaking hands with Donald Rumsfeld in Baghdad when Iran-Iraq war was commencing. Its big business..lets play wargames...and speculate on gold and oil futures and options on WALLY STREET.

Ambrose, you have overplayed your hand too often for me to take you seriously any more. I can think of at least three occasions in the year just finished when you used your column to predict armageddon within hours.

I agree things are dreadful but what do your discoveries mean if you insist on predicting effects that don't materialise in the timescales you usually provide. If you know so much, tell us what you think would happen if GB just defaulted or if soverign debt was cancelled on all sides.

Out of the mess our leaders have created a whole new debt industry that makes nothing but has been given decades of work to feed on at the expense of Joe Soaps like me. What is the answer, if you know so much?

Its good to see Americans are finally grasping what is soon to come. Its also refreshing to see how many plan to do whats necessary to take the country back.

From time to time the tree of liberty should be refreshed with the blood of patriots. American socialists and liberals...we have you vastly outgunned. I suggest we get behind everything you want to hasten the fall and start our Republic anew. This time , those who violate the constitution will be shot. And patriots, keep a list of all these people who bring our nation to its knees. It will one day become important when we build the guillotines in the town square. God Bless America.

The problem is the government made sweatheart deals with their fat cat cronies.

For example, Chuck Shumer created a bank run in 08', when he started announcing IndyMac was having problems. The FDIC government ended up seizing the bank.

In '09 the bank, with 32 Billion in assets, was sold to George Soros, for 1.2 Billion, despite what reports say.

The best part is that the FDIC promised to cover 80% of the bad debt. So instead of preventing foreclosures, the banks make more money from them.

IndyMac, now called OneWest, is being allocated additional $2 Billion in bail out money.

The US has a bad case of Sorosrot. The disease starts with rampant government corruption, and ends with 2-4 digit hyperinflation.

For D.Rumsfeld:

As usual, you miss the point.
It is not a question of America going to war with anyone.
It is a question of finding a nation that thinks it pick a fight with America and win.
I doubt that the Chinese would want to do so.

By the way, "D.Rumsfeld", I try to avoid personal attacks ("childish", "drivel" etc) in my contributions to blogs.
I think you should do likewise.
Ad hominem attacks are poor etiquette, don't you think?

If you voted for CHANGE, you are getting exactly what you deserve. In fact, there is much more coming in 2010 for you commies. I cant wait to watch all you pinko liberals dumpster dive. I hope we still have electricity so I can post it on you tube :)

I read the comments from the "old man" about to be evicted from his home. While I sympathize a bit, I do not understand. As an "Old Man", I'd think you would be wiser as well. If you spent your life thinking that everything in life was sustainable, I'm sorry. If you own something, make sure it can't be taken from you on a whim. If you voted for "Change", thinking that the government could help you, for shame. I would've hoped you had learned something from history: government does not fix your life, it creates parasites. This is survival of the fittest, by people who have always understood and seen it coming. I'm sorry that your faith in government, in systems, and your employers was sadly misplaced. Adapt, evolve, or perish. You may still have a chance. But remember that someday, you will either be one of us, or you will be dependent on us.

communism died 20 years ago. is capitalism in its current form also dead now??

Arizona State Govt will bounce payroll in February

Has anyone on here lived through the Great Depression? We are going down, I'm changing my W2 to 10, no one will be paying their taxes soon.

Since when do "Bounce" and "Treasury" appear in the same article?????

PHOENIX -- Arizona state legislators go back to work Monday in an attempt to battle a nearly $1.5 billion dollar deficit.

"The February school payment we can't make, February payroll there's no money there," said State Treasurer, Dean Martin.

Martin said unless the capitol buildings are sold before the end of the month, there will be no more money meaning, "If they continue to issue checks without having money from the sale of the buildings, I have to bounce them."

That's because Martin said spending has increased double digits during the first two years of the recession, while revenues were dropping at the same rate.

Martin said the biggest issue is what he calls welfare healthcare.

"Ten years ago AHCCCS was only a $200 million dollar agency, today it's over $2 billion," he said.

That's why he wants the state to adopt the 2004-2005 budget.

"Well than means 40 to 45 kids in a classroom," said Michael O'Neil, of O'Neil Associates, who does public opinion research, "There's a whole lot more people that live here now than lived here in '04."

O'Neil said Arizona's situation is very similar to California because revenues are far short of expenditures.

The reason he doesn't see a solution in sight is because of the governor's history with her own party and the Democrats.

"I see a recipe for stalemate," said O'Neil.

That's why O'Neil agrees with Martin who said this should be given to the people to decide, including options about how to balance the budget and how much government they want to pay for.

But O'Neil said a vote may not be likely before summer.

"This is going to be messy, this is going to make a lot of people unhappy," said O'Neil.

http://www.abc15.com/content/financialsurvival/azstories/story/Arizona-t

To: +-Frank L
on January 12, 2010
at 06:37 AM


Frank - glad to see you're true to your name.
After reading your comment, I felt relieved that there is, AT LEAST, still one person out there who thinks for himself and not regurgitate/perpetuate the propaganda.
Sadly, such reasoning seems to be in the minority... human nature, I guess.

"US stock market a lagging indicator" - not only that. It's rigged, not by Goldman Sachs specifically alone but by Geithner/Bernanke & Co. Manipulating currency moves to feign confidence and so much more.

And the rest of the world sheepishly following...

This is addressed to Jim:

I am sorry for your situation but let's call as it is. You did get change! You lost your job and now can't pay your bills. It's just change that you were not expecting. Something that you thought you could believe in but after a cold dose of reality you now realize that you can't. Let me correct myself, as you still feel that you did not get change, you are still hoodwinked!

Let me spell it out: The governments of the world are trying to prop their economies up with massive, reckless spending - a complete sugar high if you will. They will eventually run out of cash as markets will realize they are just running the printing presses. the governments hope that the population will be hoodwinked into believing all is fine. Remember the phrase: You can fool most people some of the time, but you can't fool all the people all the time. The real hangover has yet to come and the sugar crash will soon arrive! That will be more of the change that you didn't expect!

I'm an old man but I voted for change and I didn't get any.

I've been downsized out of my regular job and now I work twice as hard for not even half as much.

I've stopped paying nearly all my bills so that I can pay most of my mortgage each month.

In time the sheriff will come and insist that I leave my home but he'll have to drag my cold dead body out of here.

My deepest regret now is that I won't be here to look into the eyes of those bonus hungry AIG executive types when they're lined up in front of hastily dug pits and put down like the mangy dogs they are.

Let go of race, creed and religion when it comes to those who didn't have the foresight to know their limits relating to current and future income capacity. I'm to blame (victim in the liberal perception) as well if I didn't choose to take a second job, work twice as hard in my first and do what ever it takes to fulfill the contractual obligations I committed to when I signed my mortgage paperwork.

As an American, I can tell you that our problem is pure laziness, condoned by an administration flying around in G4's and back room deals. The worlds too large and we're all doomed. God save our children..

To Hector:
I don't believe most blame the housing crisis on minority foreclosers. These foreclosers are completly color blind.

In my life time I have applied for several mortgages and I can assure you that it was a struggle to get approved back when the banks had a much more conservative lending policy. What started the change was the Community Redevelopment Act which actually had legislation that could take punative action against lenders that would not make a percentage of loans to less credit worthy lenders, black or white. At first the banks tried to resist these loans,but as housing prices started to soar because of low interest rates one of the finacial "wizards" figured a way to profit by doing this with minimum risk. They simply took as many of these loans as they could at higher premiums, bundeled them together with other loans and sold them off to the world who eagerly accepted what seemed to be a sure fire profit maker.
It was like the gold rush days of old and all caution was thrown to the wind as most banks and buyers where drunk with the idea of instant profits. It was a giant "Las Vegas" scam on the world and there are no innocent victims. The wise chose not to participate.

After the bubble burst and many were left with no chair as the music stopped who do you blame??

Roger Godby 6.33am 12 Jan
tastelessly calls Chelyabinsk a "Nazi, Soviet, totalitarian anti Yankee propagandist, tovarisch"
simply because Chelyabinsk reports the fact that US General Petraeus, head of Centcom is widely reported as threatening Iran.

Con Coughlin executive foreign editor of the Daily Telegraph 11 January reports, "If Iran continues to defy the West, Barack Obama will be forced to launch military action".

Where's the propaganda Roger?
Are you a holocaust denier, as well?

Let us hope that Obama can restrain the dogs of war in the Pentagon and corporate America, who see military action as a solution to America's economic woes.

Attacking Iran (perceived as an enemy of Israel) is part of the US Neo-Con agenda, is it not?

Stick to the facts Roger, it's usually best.

Charles Lee
on January 12, 2010
at 07:48 AM

I cannot be bothered to keep on directing you to where you can find the information. However, take note of these facts:-

1. No one knows if the USA could be defeated in a conventional war. However, China has 2 million ground troops.
2. US navy. Reports by Admirals following war games have concluded that aircraft carriers are very vulnerable to modern high speed missiles. For your information Iran has acquired from the Ukraine some of the most deadly land to sea missiles produced by Russia.
2. Air force. Reports following war games with India concluded that US air superiority was seriously threatened by other aircraft designs and weaponary.
3. Army. Reports show that it is exhausted and overstretched. Huge numbers of vehicles need to be replaced but are not. Vulnerability of many military vehicle designs shown in Iraq and Afghanistan.
4. The Chinese have a submarine fleet which worries the USA.

Also note: Chinese High Command has stated that the country is willing to lose up to 200 million population in nuclear war. In a nuclear standoff I think it unlikely that the USA would use its nuclear arsenal unlike the Chinese.

Now Charles Lee, go and do research and not just counter my points with silly childish comments. We all know that the US military machine is visually impressive, but it is not invulnerable as you keep drivelling on about.

One can help oneself by setting up an own money zone. Look at "johngrootjr" and "colonial scrip" to see how this worked for New England before the
bankers destroyed it. Avoid banks. Both Bank of England and Federal Reserve are just private families and not government agencies which explains their behavior. As far as I can see colonial scrip fufilled, too, the savings conditions of Mies. Read Peter Schiff and JOhn Browne of "europac". Be of high
moral standard.

Actually if you look at it from another prospective Al Quieta has been using the same tactics on the United States as the United States used on the Soviet Union to bust them apart during the cold war. Also shortly before the break up the Soviet Union was involved with a never ending war in Afghanistan which also was an endless money pit. History repeats itself except this is a group without a country.

This is what happens with an administration that falses with the stimulus, health care, and even global warming. Global warming is now being proven to be false. Check out this article and the attached scientific paper. Pass it on ! http://www.thecrponline.com//entry.php?11-Is-The-Famed-Greenhouse-Effect-Just-A-Bunch-Of-Hot-Air

For ISpec:

"I don't care anymore. Neither my indifference or my passion makes a difference.
My wife died a year ago, i lost my home and my business and I moved out of the country.
Who ****ing cares."

I've just found your post, ISpec and I was very sorry to read it.
I'm now in my sixties and the one thing I know for sure is that we should never lose heart and never give up hope.
Life is full of surprises, and not all are unpleasant.
Many are totally wonderful, and beyond our ability to imagine them.
Hunker down, ISpec - the wheel of life will turn for you.

Ron Paul was the man who based his entire campaign on this. He was called many names.. Except Mr. Right.

"alleged USA military superiority"

Name any power, D.Rumsfeld, that can defeat the USA in conventional warfare.

For Hector:

"Or, how about a hyper Dickensian society?"

Bah, humbug....
At least Christmas is behind us now. It can only get better.

For Tonyw:

""It is difficult to get a man to understand something when his salary depends on his not understanding it." Upton Sinclair"

Very true, Tony.
Just think about the Met Office, headed by a leading Global Warmer, David Hurst.
Which member of their staff will understand satellites that show no rise in global temperature in a decade?

"That will be followed by the election of a true leader, for the first time since Reagan, in 2012."

Ronald Reagan is your idea of a true leader, Maurice Williams?
God help America - the man was a cheerful imbecile who couldn't work out what was real and what was cinema.
The last American Giant was FDR.

There is no way out. The economy is ruined and we are headed for a total economic collapse. All the talk and monetary theory in the world is not going to change this fact.

In 18-24 months there will be an armed revolution in America and it will be like nothing ever seen.

I just hope that when everything is lost, the people of the U.S. and the world will reject the old ways and create a true society based on the needs of everyone, and not the desires and selfish ambitions of a handful of "privilaged" groups or individuals.

To David: I agree partly. Financial obligations are greatly exceeding gdp. It is unsustainable in the long run.

To John Mack: I agree - gold served as a reasonable check against the whims of profligate politicians.

To David and Steve G regarding minorities and the housing crisis: Any time you offer the opportunity to own a home to a person who might not be able to own one otherwise, that individual would be fool to not take it. Undoubtedly, many individuals bought homes under these circumstances. Why these individuals are assumed to be "minorities" I cannot say? There are far more poor whites than poor blacks or latinos in this country. Are you making the argument that poor whites didn't happen to participate in this rising tide because of their moral righteousness? These people are more unified by their socio-economic status than by race or ethnicity.

I really believe in free markets... up to a point. The euphoria of profits can generate a calculus that moves beyond risk-taking to craven rapaciousness. Ultimately, it is encumbent upon the owners of capital to allocate that capital given risk/return considerations. Why you would ever provide capital to someone who has no documentable means of paying it back is beyond me. More importantly, it is beyond the calculus of the rational capitalist.

Now, some will claim (I am assuming you), that these owners of capital had a figurative gun pointed to their head because of the Community Reinvestment Act, forcing to dole out hundreds of billions (ha!) to unqualified minorities.

If you want to talk about fraud, let's discuss the fraud in its entirety: Many people were sold adjustable mortgages under the notion that the rising tide of property appreciation would increase the value of their home so substantially that they could simply refinance it a couple of years down the road before the ARMS reset and get a more affordable rate or they could simply sell the home for a profit. They conned an ill-educated public into believing the ultimate American dream: get rich quick with little to no effort.

And take a look at the numbers: there are about 11 million African American home owners in this country. What percentage of them have engaged in this "fraud" of cashing out? Let's say that it's 10% (absurdly too high a figure). 1.1 million homewowners times the median value of a home in 3rd Qtr 2005 (near the height) which is $240,000. That puts the figure near $250 billion. Even the $240,000 median price for a home is probably an overestimate for many African Americans mortgage applicants during this period. Not good enough, let's throw in Hispanics. There are about 6 million Hispanic owner occupied households in this country. Let's say 10% of them also committed fraud. That's 1.7 million TOTAL times $240,000... DRUM ROLL... a grand total of just over $400 Billion.

For the sake of argument, let's round up to an even $500 Billion. The U.S. economy of $14 Trillion is collapsing because of this $500 Billion? Sorry, but it wasn't just minorities - poor people, of all races, were bamboozled in the American real estate market.

IMHO, the banks as the guardians of capital are to blame for being so reckless, knowing that they were going to make their profits no matter how things turned out (or so they thought). This way of thinking was endemic to the system. Just take a look at the commercial real estate market. Are you going to blame that on minorities too?

I do appreciate your perspectives my fellow citizens, but I respectfully dissent.

For the far-left loonies, making it more attractive to not work than work is the downfall of all systems of government. Making it more attractive to be irresponsible as a parent than being a responsible one is the destruction of society.

I think these valuable comments are well put but why not in USA newspapers?This one is wonderful but not quite US one.What is needed is good government and not Rep nor Demo.Bought and paid for my top 2%.Need genuine christians in white house.I suggest Devvy Kidd and Ron Paul.They have great ideas-conservative mostly.

Hector,

While I agree with some of the points you make, I do disagree with your argument to the far right loonies.

In particular:

1. When you say that there is not enough gold in the world to back up global economic activity, it's not clear to me that the amount of gold is important. In a free market where gold was used as money (not a given, but probably the likely result of a free market), prices would adjust to reflect the relative quantities of money and other goods. If there is "less" gold, that just means that prices, as measured in gold, are lower. Obviously there needs to be enough gold for it to circulate in sufficient quantity for everybody to use as a means of exchange, and before the invention of computers this might have been a problem becaue of the physical limit on divisibility - but it is now possible to store gold, divide it into infinitesimal quantities, and trade it digitally.

2. When you say that the monetary peg would cause economic growth to permanently come to a standstill (about 1.5-2% annually), why do you think that econmic growth cannot occur without the money supply expanding? This is an incredible claim, and I think you need to explain why there needs to be an ever-increasing money supply for people to trade and work productively (which is all that is required for economic growth).

I would argue that as the economy grew faster than the money supply, prices would gradually fall. Certainly an examination of the late nineteenth century in the US indicates that this appears to be the case. During the 1880s, under a metallic standard, commodity prices fell, output and living standards rose and the economy grew at an average of 3.8% per year. It is generally concluded that this was the greatest decade of growth in US history [Rothbard "A History of Money and Banking in the United States"].

Fiat currencies, in contrast, typically result in low real growth rates and in the terminal stages, severe economic shrinkage. Witness our current situation. Under a debt-based fiat money system, GDP gradually ceases to act as an indicator of economic growth as GDP is a measure only of spending, and therefore rises each year not in response to wealth creation, but in response to a binge of debt-fueled consumption. When looked at through this loens, it easy to see that the claimed economic "growth" of the last few decades has been nothing but the drunken orgy of a spendthrift blowing through his inheritance, measuring his wealth by how much he spends, and each year claiming to be richer than the previous year. Absurd as it sounds, the emperor truly has no clothes.

It's also worth noting that even under these circumstances, the US govt has had to resort to fiddling the numbers to pretend inflation is much lower than it actually is in order to report GDP growth at all, despite the massive increases in debt.

So I would argue that it is only with a free market in money (where my bet is that gold would emerge as the money of choice) that any growth is to be had at all.


In that situation, are you ready for a one-child policy? How about technological progress at a snails pace? Or, how about a hyper Dickensian society?

On the contrary my firend, that is what will result if we do not allow people to choose their money freely and instead rely on the state to enforce a monopoly to the benfit of a very small number of bankers (and the politicians who are the recipients of their bribes) at the expense of the rest of us.

I do agree with your assesment of the problems. The solution cannot be raising taxes though -sadly that will result in less revenue not more, although it will undoubtedly be attempted to the further misery of all. One way or another, spending will be cut. A sane man would prefer that we do it sooner rather and later, because if we do not make the cuts now then we will eventually drive ourselves into complete collapse.

You also asked why is it that the stock market keeps going up?

It's incredibly simple really - because the government is creating so much money and it has to go somewhere. Inflation always shows up in the monetary metals, commodities and the stock market before it hits the store shelves.

Why has the middle class been decimated economically over this period?

Because they've been robbed blind by the fiat currency system which, to all intents and purposes, allows banks to print money out of thin air, while denying that ability to the rest of us. If I am able to print a $10 bill in my basement and use it to buy some apples from you, I have stolen those apples just as surely as if I sneaked into your orchard one afternoon and plucked them from the tree. Of course you can't detect my theft as easily, and the cost is spread out across the whole of society rather than borne entirely by the owner of the apples, but it occurred all the same.

"Why is our economy so geared to consumer spending and low-paying service sector jobs?"

Same reason. A fiat currency and the corresponding debt bubbles it generates causes massive misallocations of capital that could not ccur in a free market. The consequence is destruction of wealth which can persist for a long period of time, as it is so cunningly masked by a rising GDP and apparent standard of living, even while the underlying capital is being eroded with every passing year.

"The details strongly suggest that our society has been out of whack for quite some time (including under Reagan)."

You need to go back further than that to understand the causes. We've been out of whack since the Fed was created. The 1920s were a fractional reserve banking bubble. The 1930s and 1940s were the consequence. This time around, we recklessly resorted to abandoning the gold standard in 1971, rather than face our medicine at the time, so we could continue our destructive spendthrift ways for another forty years. The consequent depression this time around will proprtionately dwarf the Great Depression in amplitude and duration. Of course this time around the government and their propagandists will spend the entire time inventing statistics to assure us all that this is not the case. It's worth visiting www.shadowstats.com to see the work of an economist who recreates the old measures of CPI, unemployment, GDP and M3 from the underlying data so we can make true comparisons to previous decades. Not pretty.

Priam :-)

Seems during the bad old days, futures traders didn't mind being switched over compulsorily from indexed pricing regimes to cost-plus only. They made up the difference lost from the disappearance of risk markets in the total volume of new (or should I say "resumed") trade.

It could sort of tough on those heavily invested in gold however, but based on AngloGold's and others' cost of mining and delivery, not much more than 5 to 10%. Their costs of operations are at $590/troy ounce, or thereabouts. It's posted at the site: http://www.anglogold.com

I'd say cost plus 30% so the IRR would be maintained according to GAAP-worthy safe criteria so it isn't insurance people, too, jumping off buildings.

A bit long in making your point.

We should all be thankful for the rare breed such as Ambrose who is prepared to stick their neck out and tell it as it is supported by unquestionable in-depth research and intelligence. Yet some simply cannot handle the truth!
My sympathy goes to the poorly advised and ill-read Americans who live in a fantasy world of polarized ideology and political inbreeding. "Yep-er,faml'ys bin repub'cun goin back tu d'a civul war"
The financial and economic devastation in which they are now drowning, is quite simply as a result of alarming blind allegance to various insidious myths imposed upon them by the greed merchants they call "Free Marketeers", "Unfettered Capitalists". They defend and support the thieves that mugged them. The mantra continues even while they bleed. Any plan, solution, idea, concept that does not explicitely conform to their limited flawed logic is demonized. Obscenely paid spin doctors discredit the thoughtful voice of reason. The mesianic Media bring the kettle of disinformation to the boil. How amazing! How sad! And if you are a foriegn spoksperson, and construed to be making judgment upon the US, heaven forbid. The narcissistic societal personality disorder will embrace the nation to smother the voices of honest evaluation from within and without the country. Is the US as once percieved, now doomed? Can they accept that they themselves are to blame for the financial demise? Will they ever realize that a full decade(and more) brought them to this implosion...that their foriegn policy, deregulation, unbridled greed and corrupt political power, deceit from many levels imposed upon themselves and other nations, has eviscerated the well being of ten's of millions of citizens. Where is the outrage? Where is the accountability?
-Will they as a nation and the sociopathic control entities that run things, ever shed their pathological hatred for social policy that other civilized democracies embrace? Will it ever dawn on them that the current President is not responsible for the cataclysmic financial systems failure and meltdown? Yet some of the "Blame Obama" rehtoric boggles the mind! Some of it so well written that one cannot escape believing it is an orchestrated boiler room operation bordering on treason.
The unfortunate current President has inherited, and been given the impossible task of bailing the nation out of decades of decadence, political rot, culminating in a national near-death experience! The ship of state was barely saved from "going to the bottom"
The term RIP now gives currency to another American myth "Manifest Destiny". Myths die hard!
During the 1950's and 1960's the US "had it all" including the treasury of the industrialized world resulting from WW2 European destuction... and it took them less than 50 years to blow it all. History will shake it's head!
There are many thoughtful Americans who know the real story behind recent shocking events, the real facts, cause and effect. They can and will, given the chance, produce intelligent solutions, and with time, patience and pain, help restore a much revised edition of "The American Dream". An authentic version.
But, without big changes in the national mind set, acceptance of some rude truths, installing integrity with honest people, turning down or off the mindless mutts of the radical fringe and discouvering the humility of listening to wisdom regardless of source .........I hate to say it BUT sorry America, it's probably checkmate!

Same people who financed the Russian Revolution and allowed massive... immigration after the failed revolution in Russia of 1905 to the USA... same people who set up the FED and run it now... same people who encouraged Hitler by making a pack with him... same people who surrounded Wilson and Roosevelt, same people Alger Hiss worked for and who were his educators, same people who let out credit and contracted it after the WW 1 creating the Depression, same people who Stopped the armies before of the West in WW 11 to allow by order basically to Churchill and Roosevelt a Communist prison camp for 44 years in "Eastern" Europe, same people who kill Forestal and Patton, same people who arraigned for atomic bomb hardware through the assistance... program to Russia... same people who knew of and suborned Sept. 11th, Spain and London and and an incompetent Christmas bomber, same people who let out credit after Sept. 11th and contracted it to elect their creature, same people who shot Kennedy and it wasn't "Oil Men" from Texas, same people who write security software for all American computers, same people who control
schools and mind and every prominent Think Tank, same people who will not allow a vote on the EU in England, same people who own the media all of it... same people who create the heros and villains in Hollywood, same people who were the Bolsheviks and the "Fascist" and same people who look at the rest of humanity as "animals" their words... same people who killed 120 million plus for Communism, same people who created the IMF and the World Bank, same people who control the drug mobs of the world and though them destroy cities and control the Afghan poppy fields again after the invasion. This article with its reference to "fascists" above isn't a tiny bit of the truth... more of the same. Listen closely: the reason nothing is being done is that a panic IS the goal, starvation IS the goal, military control IS the goal, unemployment IS the goal, FEAR Is the goal... and of all of this, Liberty is the enemy of and its creativity and the individual human strength of spirit it creates its mortal enemy. The dark tribe's hive hums with psychotic religious hate for all of humanity except itself.

Relax people. Much ado about nothing. All that has to happen is for Obarmy to seize Goldman Sucks' assets and redistribute to the destitute and weary. With what's left he can buy China, pay off Iran, halt global warming, bring peace to the Middle East and restore the good ole U.S. to its proper position as the numero uno economic powerhouse. See. Change we can believe in.

We should all be thankful for the rare breed such as Ambrose who is prepared to stick their neck out and tell it as it is supported by unquestionable in-depth research and intelligence. Yet some simply cannot handle the truth!
My sympathy goes to the poorly advised and ill-read Americans who live in a fantasy world of polarized ideology and political inbreeding. "Yep-er,faml'ys bin repub'cun goin back tu d'a civul war"
The financial and economic devastation in which they are now drowning, is quite simply as a result of alarming blind allegance to various insidious myths imposed upon them by the greed merchants they call "Free Marketeers", "Unfettered Capitalists". They defend and support the thieves that mugged them. The mantra continues even while they bleed. Any plan, solution, idea, concept that does not explicitely conform to their limited flawed logic is demonized. Obscenely paid spin doctors discredit the thoughtful voice of reason. The mesianic Media bring the kettle of disinformation to the boil. How amazing! How sad! And if you are a foriegn spoksperson, and construed to be making judgment upon the US, heaven forbid. The narcissistic societal personality disorder will embrace the nation to smother the voices of honest evaluation from within and without the country. Is the US as once percieved, now doomed? Can they accept that they themselves are to blame for the financial demise? Will they ever realize that a full decade(and more) brought them to this implosion...that their foriegn policy, deregulation, unbridled greed and corrupt political power, deceit from many levels imposed upon themselves and other nations, has eviscerated the well being of ten's of millions of citizens. Where is the outrage? Where is the accountability?
-Will they as a nation and the sociopathic control entities that run things, ever shed their pathological hatred for social policy that other civilized democracies embrace? Will it ever dawn on them that the current President is not responsible for the cataclysmic financial systems failure and meltdown? Yet some of the "Blame Obama" rehtoric boggles the mind! Some of it so well written that one cannot escape believing it is an orchestrated boiler room operation bordering on treason.
The unfortunate current President has inherited, and been given the impossible task of bailing the nation out of decades of decadence, political rot, culminating in a national near-death experience! The ship of state was barely saved from "going to the bottom"
The term RIP now gives currency to another American myth "Manifest Destiny". Myths die hard!
During the 1950's and 1960's the US "had it all" including the treasury of the industrialized world resulting from WW2 European destuction... and it took them less than 50 years to blow it all. History will shake it's head!
There are many thoughtful Americans who know the real story behind recent shocking events, the real facts, cause and effect. They can and will, given the chance, produce intelligent solutions, and with time, patience and pain, help restore a much revised edition of "The American Dream". An authentic version.
But, without big changes in the national mind set, acceptance of some rude truths, installing integrity with honest people, turning down or off the mindless mutts of the radical fringe and discouvering the humility of listening to wisdom regardless of source .........I hate to say it BUT sorry America, it's probably checkmate!

The Great Recession of 2008 cost me a good job I had enjoyed for over 18 years. Lost good pay and all my health insurance. I'm in my fifties. Back in college on a Pell grant and financial aid learning new skills to carry me out to the end of my life. Roll with it, baby. Complaining don't get you anywhere.

@Chelyabinsk

I recall a "progressive" professor of political economic assuring me in 2008 that the Bush administration was going to invade Iran, despite every outlet screaming its head off about troop shortages. Naturally, the invasion did not happen.

It will never happen, tovarich. If the Iranians I know are right, the Iranian people are finally going to bring the mullahs down. It will be very bloody but done without any "help" from Obama.

Depicting the US as a bloodthirsty hegemonic leech has been a staple of Nazi, Soviet, and other totalitarian propaganda for decades. It's amazing how many (want to) keep buying it. Is the Yankee the new Jew who is behind all the world's ills?

you are all idiots

lets see the world economic cycles play out until capitalism meets its end and everyone in the world can be summarized on a computer file somewhere.

until then, expect wider and faster swings in all the financial markets. And I'm sorry to burst your bubble you gold bugs, but gold is a commodity subject to manipulation just like any other commodity. Its not going to save you.

Too bad the Obama CONTROLLED liberal media, I mean the Propaganda Ministry, in the states is not permitted to report the same news. The SHEEPLE that voted for this FRAUD will make the decent U.S. citizens pay big time for their idiotic thinking and choice. As the saying goes... " Those who do not learn from History are doomed to repeat it". God help us!!!!!!!!

Inflation will set in as the dollar depreciates because of money printing (quantitative easing). Inflating debt is a painful way to pay it off.

Falling house prices will not halt monetary inflation.

I love the liberals in here who complain about capitalists "outsourcing" jobs. Hey, kuckleheads, why do you think jobs get outsourced? To avoid crippling taxes and labor unions-- both inflicted upon us by liberals. You need to look at the root cause of this cancer in our society -- liberal "progressives."

This recession could have been only an economic winter lasting a few months, leading into the renewal of an economic spring. The economy was not sustainable as it was before the recession started, and everything was starting to reset itself.

Too bad that Ben Bernanke, Henry Paulson, Timothy Geithner, George W. Bush, and Barack Obama thought they knew what was right for the economy. Instead of replacing what failed, they propped up a failed system. They paid off all the robber barons in Wall Street with money they robbed from the American people.

How much longer are the American people willing to put up with this blatant usurpation of their rights and liberties?

Oh please.. Free market..Government stay out?? The problem is the government stayed out for far too long.. Greed has settled into the banking system in a huge way. The simpletons of the Tea Party groups had better take cover..the end wont be pretty, and their solutions will make it that much worse..

Frank, seriously, grow the hell up. Your boy Bush caused this mess and left Obama holding the bag. If you aren't aware of this, or are pretending to be ignorant, you really should just stop voting.

deys all markists and im da mark dey is laying into....

A nice man named Donovan at CME Group at http://www.cmegroup.com has been moving forward with a working credit default swap programme which is NOT the Ponzi racket the original go-round was, and which is doing a fair job of helping to bury this massive mountain of debt without triggering a Weimar-style deflationary run on our currency. I was dead wrong about it a month ago. It's the real megillah and it seems to be working, thus far. It's not a flip strategy, it is a structured and orderly reinvestment scheme with underwritten calls.

I am wondering if taking the commodities market off-index and instead putting it on a fixed cost-plus basis temporarily as we have always done in wartime might not be appropriate, say, a limit set at 30% IRR as the rudder for the economy's ship. The term Atlee and FDR used for this procedure was called "rationalization."

Just seems a pity that the only people left with jobs when all the dust settles will be futures traders. They should have to roll up their sleeves, too, at least for the five to ten year bad patch we all share now.

G.
on January 11, 2010
at 06:02 AM

Don't give up, they are out there. I can see the difference over the past six months here in town. Takes a while to shake a nation out of its own two decades of madhouse self-indulgence and pridefulness.

America needs to learn humility.

I thought free trade was about natural resources not slave labor.
Thats the problem we can't compete with slave labor. It's sucked all the jobs out of the USA.
The way to get jobs back here is to put tariffs on imports that are not natural resources.
If we continue to compete with cheap labor our country will go broke.

America's State's Sales tax receipts are down in the 4th qtr.and personal consumption accounts for 70% of the US economy. But the GDP in the 3rd qtr. was up 2.2 and the 4th qtr will most likely show 3.5. Consumer credit is contracting, When it is expanding it is additive to GDP, When it is contracting it is subtractive to GDP. Civilian Goods Producing Employment is lower then Government Employment. Is Obama lying to the America people whe he says "Our economy is growing again"?

"You can always tell when that moron Matt Drudge links to a story. The comments get filled with incoherent lunatic rantings from the most ignorant people in the world, spewing crap about Marxism and Bible codes."

Yet Drudgetard is somehow close behind, trolling all the articles on the site.

Enjoy your 10 months the dems have left in power. It will be a LONG time before they get elected to ANYTHING, after November. America is sick of your lies.

Well what did we expect ?? We move USA manufacturing to China and Mexico, and admin jobs to India.... unless there is a revolution in the USA, and a government is installed that will bring back REAL jobs.... (not delivering Pizzas)... then things are going to get worse and worse... I truly don't think average Americans "get it"....

How there can be a better economy if American firms pay Mexicans and Chinese workers, and even if some stocks go up, American workers keep on loosing jobs. Soon there will be no one to be fired.
Welcome to USSA. Way to go, Obummer.

Lets face it. This is bigger than any of us really has the ability to grasp. We throw concepts like "Trillions" around as if we can comprehend the enormity of our problems.
By engineering a Global Economy we have only created a control mechanism that will shortly be used to govern the planet (and poorly, I might add). This was the purpose of the old League of Nations, the current U.N. and who can seriously think that the E.U. will limit itself to European matters? Your new president will let you all in on the plan soon enough, meanwhile let the Brits and Franks and the rest revel in their smug satisfaction at Americas suffering.
I don't doubt the possibility of a major collapse of the U.S. that goes far beyond the economic woes of today, but why that would please anyone is beyond me. While it may be fun to spout the Leftist rhetoric you picked up at University, the FACT is America has been a force for good in the world. The U.S. has outspent the rest of the world combined in charitable giving, finacial aid, food programs... and you all know it. Be careful what you wish for.
Meanwhile if you like the prospect of having countries like Brazil and China leading the way then you have a lot to look forward to. Forced sterilization, death squads that kill off the homeless, organ farming at the expense of the poor or oppressed, all the great practices of these wonderful, civilized new leaders of the world.
If you view yourself as just another piece of meat exhaling dangerous CO2 and using up valuable natural resources then this will be just what the doctor ordered, what's your blood type, Hu Jintao may need your liver soon.

when banks and loan companys are forced by the government to give loans to illegal aliens with fake or stolen social security numbers and no means to pay back those loans, they will surely default and everyone will suffer, but this is what happens when liberals are in power.

Go, read David Wilkerson's "THE VISION" written sometime around 1972. The timing of the prophecy is wrong but the multiple prophecies are 100% correct, so far.

G. said, 'So I ask... "Where have all the real Americans gone?"

John Wayne... the "Duke"... where are you when America needs you?'

--------------

He died of lung cancer many years ago after the cigarette manufactures lied and said smoking was healthy.

Then the liars bought food manufactures and continue to lie to us by claiming their factory farm products are safe, even though they contain GMOs, MSGs, pesticides, herbicides, fungicides and God knows what other toxins are being put into our food supply.

The banks and insurance bailouts were more of the same 'trickle down' mentality that has plagued us since Reagon. Take from the middle class and give to the rich. If those sums had been invested in small businesses and mortgage relief people could still be buying and saving. The banks would benefit from that. Too big to fail? How about too many to fail? How about making funds more available for us to compete? There should be twenty American auto makers not three.

The banks and insurance bailouts were more of the same 'trickle down' mentality that has plagued us since Reagon. Take from the middle class and give to the rich. If those sums had been invested in small businesses and mortgage relief people could still be buying and saving. The banks would benefit from that. Too big to fail? How about too many to fail? How about making funds more available for us to compete? There should be twenty American auto makers not three.

Very interesting to see we the Americans coming to this Web site.

The fact is that the censorship in the US is getting really bad. NBC, ABC, CBS and CNN are not publishing anything that is meaningful for us. While the EU newspapers were publishing things like this:

“SCIENTISTS at the University of East Anglia (UEA) have admitted throwing away much of the raw temperature data on which their predictions of global warming are based."

The US newspapers were simply silent. Totally in complicity with the Global Warming hoax.

I also can see the BBC doing similar things in the UK.

This makes me believe that the internet is about to be silence following the Chinese model.
So let’s enjoy it while it lasts!!!

Good article AEP soon you will agree the best place to be is Cuba... the heck with capitalism dreams.

That sympathy by the local sheriff is going to turn into outright support. Local law enforcement needs to tell the Wall Street gang to repossess the homes themselves. And they will, after it becomes apparent that there is a mortal danger in repossession. Wait until interest rates start going up.

I'd like to see the banksters, with their soft hands, Harvard mouths, and $10M portfolios, come down and do some of their own dirty work.

Or burn them out of their mansions, for all I care. Mortgage free and proud of it!

You might have made money betting against America in the 2000's but do so this decade at your own peril.

January of 2011 will be the first year of a truly conservative congress that will stop at nothing to unleash the engine of American Exceptionalism and real economic growth. That will be followed by the election of a true leader, for the first time since Reagan, in 2012.

"The groundwork for this depression has been laid down for years. It's called " Globalization". The sociopathic capitalists have been " outsourcing " jobs to 3rd world countries for years." - why not outsource the top 100 wage earners overseas and we can hire more out of work americans.

edward vale, check your numbers. According to BLS; 12/2004 U-6 9.1% vs U-3 5.1%, a spread of 4% "discouraged".
12/2009 U-6 of 17.1% vs U-3 9.7%, a widening spread of discouraged workers of 7.4%, almost twice as many (probably more when you factor in the growing work force over 5 years).

We are so screwed. Welcome to the new world order.

We need a leader we respect.A person who is calming,confident w/o being arrogant. We must improve education. If some need to be put in separate schools to get caught up, so be it. Stop letting women support themselves via having babies. Use condoms, abstain or get fixed. With the second one make fix.

Too many wackos putting in their two cents here. Why doesn't the Telegraph impose a mini-IQ test for people before they're allowed to post??

For those nuts who are unemployed, pissed off, calling for armed insurrection in the US, Obama-haters, why don't you chill out for one second. THINK for the nano-second that you're capable of. Most normal Americans are employed, have kids to feed, are not homeless, still believe in capitalism and democracy. And yes, most of us voted for Obama too!! You losers who are calling for armed insurrection and rebellion are nothing knew, in fact, my ancestors killed a bunch of you during the Civil War. Now do you really want to turn America into another militia ridden cesspool like Iraq, only x100.

All of this is impossible. Jesus Christ is our President. And we pay him and everyone else 6-figure salaries to prove it. And apparently, we don't question anything that they do and continue to pay them 6-figure salaries.

So Obama's middle initial actually stands for Hoover?

Who knew?

I see a fascinating, repeating trend in who makes comments following an article like this. Angry day traders who despise anyone releasing real information that might jeopardize their quick profiteering. The other half are angry rednecks who want to blame "liberals" and can't help but preach how it's time for a new America. Scarey stuff.

Ambrose....stop being an infact. be a real man. GOLD has skyrocketed and so have ALL commodities from the lows. Just the past few weeks steel prices have been raised at major producers here and they're gonna pass that on UP the food chain.

Stop being a child. the market is wildly overvalued AND inflation is being built in to a crazy level with oil already at 80s again ala 2008

We believed lies. That is how we got where we are. Life is way more complicated than the simplistic kindergarten view of things the media gives us. In the end, the greatest evil will be shown to have come from the media itself. They'll all burn in Hell for it.

Hector, two things. First of all the ratio of contracted financial obligations to global gdp is 10:1
and rising. Let's face it, that is not sustainable.

Furthermore, who then were put into houses that they could not afford? It is one thing to
have a low introductory rate, where practically anyone with a pulse would receive, but when
it comes to renegotiating the mortgage, a major shock to the system results.

boy I bet all those unemployed, about-to-be homeless people are really relieved that they will at least have health care. oh, wait, that won't kick in for another 4 years, oh, and it will still leave millions uninsured! oh well! but never fear there will be $750.00 fine! well, I guess it's the thought that counts! That's what being a liberal is all about anyway, intentions and feelings as opposed to results and being a grown up. since you brits like obama so much, well you can have him!

But our Great Leader Obama says the recession is over. How can the Telegraph dispute the new god?

The groundwork for this depression has been laid down for years. It's called " Globalization". The sociopathic capitalists have been " outsourcing " jobs to 3rd world countries for years, while at the same time weakening the power of the labor unions, starting with the Air Traffic Controllers under Reagan back in the early 80's. They always claim their ONLY obligation is to their shareholdrs. What the sociopaths forgot is the goods their companies were producing in the 3rd world countries were being consumed by the middle class in the developed countires that they were destroying over time. Now the tipping point has been reached- and this depression will not go away until the sociopaths are eliminated.

To the cut and paste Hector, I feel that you are simply under estimating the problem. I strong disagree with your minority payment on time, the fact is that they are the ones that have continually, by their own accord or by an agent, re-fi the home until it has become a financial bomb. For them it is easy, walk away. Secondly the bottom feeders multiplied the problem, those loan brokers and agents that fill out the forms without checking data or in most cases made it up.

I have enjoyed reading these comments. I am a middle class white American male who is still lucky enough to be employed. I am a fiscal conservative, I believe in the Constitution and the Bill of Rights. I believe in a small Federal Government and stronger (but not too strong) State Government. I believe if the Government would stay out of running businesses we would all be better off. Free Enterprise works! Freddy Mac & Fanny Mae failed because Barney Frank (Congressman) forced them to make loans they KNEW would never be paid back. If the banks refused to make the loans the banks would be picketed as a racist organization, and we couldn’t have that. Every time the Feds meddle with business bad things happen. Bad companies & banks should fail. That creates a vacuum for better more agile ones to spring up. As a country we have strayed from the teachings of our founders and we deserve to fail. We reward failure. We punish success. Half the country pays no Federal income tax at all and they vote higher taxes on those who do. Our manufacturing is fleeing the country because of the second highest corporate taxes in the WORLD! Our social net has become a hammock.

Things are about to change. True Americans are collecting together in larger and larger groups. The 9-12 Project, The Tea Party, and others. These groups are made up of all races and backgrounds. All social and economic levels. We live within our means and are hard working good citizens. We pay our taxes, go to Church and give to charities.

To my European friends, watch the heads roll in Washington come November (both Democrat and Republican).

"For the far-right loonies: Returning to a gold standard is a ROMANTIC FICTION. There is not enough gold in this world to back up global economic activity."

Yes, fiat IS the way to go, PROVIDED you have the discipline to expand the money supply in proportion to increases in population, productivity etc, NOT because your intention is to erode the value of savings/debts to benefit from cantillon effects, and thus gain from making inflation-backed bets/speculations that benefit you at the expense of others.

And that's the real trick, isn't it? The gold standard was an artificial constraint on growth, but fiat currencies have been abused by the greedy/stupid/corrupt.

(nb - a small amount intentional inflation DOES seem to be useful to maintain growth and trade, but we have been given far more than that in recent decades.)

I read the foreign papers to get the truth about the American economy. Our papers are cheerleaders now for disasterous economic policies that cannot possibly work. Yet the market goes up. It seems to me that when the printing presses stop the party will be over.

October 3 2008

Until a very important lesson has been learned the crisis will prevail. At the close of the 1900's we left behind the greed, avarice and jealousy (I want what you have, knock the other fellow off the ladder mentality) of the past century, the, I, I Me, I Me, I Am. We are now in a time of Us, Us We, Us We, We Are. This is now a time of sensitivity, hypersensitivity and anxiety, there will be peace in this millennium but before this can happen humanity has to learn the lessons of patience, sharing, caring, consideration and co-operation for and with others, working together for the betterment of all. Unfortunately humanity will not learn these lessons voluntarily, they will have to be dragged there, kicking and screaming. Money, power and position (greed, avarice and jealousy) must be addressed. In 1995 I said all of the above, I said that "there would be a cataclysmic global event which will create a downturn, I'm not sure what it will be but there will be geophysical earth shift of some kind associated with it.” (9/11and the movement of the Richter Scale from the impacts) Sometime in the 2000's there will be a global Depression like we've never seen before, I believe it will again be triggered by America and America will implode." (As God is my Judge, these are my words!)
I used an example "at present you will have 10 people living singularly and burning 10 light globes, in the future you will have 10 people living collectively and burning one and it will be through economic endeavours"

At the time economist type friends and associates said it could never happen as there had been built in methods to prevent it ever happening again.
Three weeks ago I was in tears as I read the newspapers, I always knew I would be caught up in it but there was nothing I could do.

So in answer to your question, there may be a delay, a temporary resolution but the undercurrent remains. Things have to change and one could say that this rescue plan continues to feed the ideology of Money, Power and Greed........left over from the previous Century.

I hope and pray that I am wrong BUT to date I have been extremely accurate. The Lessons of the Universe are Strong and Harsh but in the end the hardship will bring the change of the collective mentality/consciousness, needed to function in the new Millennium. There will be Peace, I know not when..........The Spiritual Side of Mankind is Evolving.
..............
December 28 2008

People are asking how long the current contraction of the financial markets / systems of the world will last. Financial Journalists / Governments etc. Are scrutinising, pontificating and guessing.
What has happened is that the systems as we know them have totally collapsed and no amount of band aid treatment will resuscitate or reinvent them. The collapse of the Twin Towers in the Wall Street area of New York in the first year of the new millennium signalled the beginning of the changes which are now upon us and no amount of human intervention can prevent what is happening. The rubble which remained is symbolic of the change............down with the mentality placing Money, Power and Greed above all else.
There was a very significant and symbolic message / teaching / lesson associated with the collapse of the Twin Towers on September Eleventh and mankind has so far failed to head, grasp or recognise the symbolism.
Therefore, I believe this downturn will continue for a prolonged period of time and I am talking years...The worlds financial systems, as we know them, will continue to fall and no amount of Government interference / assistance will be able to stem the inevitable tide of changes taking place. The old ways are dead they finished with the last day of the last Millennium, The trouble is the “Leaders” of the Governments / Organisations of the World are being entrusted with the tasks of reinventing the wheel or of keeping the continuity of the wheel moving forward or rather backwards in the same “Ways of Olde” direction, this will never work, because we are now operating in a Brand New Era........
We are now living in a time of Sensitivity, Hypersensitivity and Anxiety, a time when people all over the world will need to pull together for the betterment of all. Before this can happen it is necessary for all people to learn to be Patient, to Share, to Care, to be Considerate of and Co-operative with their fellow man. We are no longer operating under the premise of I, Me, I, Me, I Am.............But rather under a new Premise of Us, Us, We, Us, We, We Are. This new vibration began with the new millennium and will last through to the end of this current millennium. We are now embarking on a time of harmony and peace, a time when the old competiveness is no longer. It is a time when working in unison with our fellow man will reap great rewards, but it is important to realize that the past ways are past and cannot be resurrected they are of a different time and of a different people.
The changes taking place are necessary for the new ways to take effect. Humanity will be changed and will be far better off for the change. Global circumstances will precipitate the environment necessary to activate the situations which will trigger the initiation of new and better systems. Gradually mankind will adapt to the new systems, the Collective Consciousness of Mankind is changing.
When mankind has learned the lessons being imposed through the current disruptions, then and only then will change begin to take effect!
Currently, governments and financial experts are dumfounded by what is taking place with the financial systems globally and the general consensus of opinion seems to be that basically they have no idea of how to “fix it”, could this then be because there is no “fix?”....They are working hard to perpetuate the greed, avarice, jealousy and money is God attitudes which have caused the total collapse of these old systems. Not understanding that the Universal Vibrations have changed permanently.

How long will this downturn last, you ask, it will last as long as is necessary for mankind to realize the old ways are dead and to accept that change is inevitable, total change, a change of the collective consciousness of man, the mind is a very powerful tool, but I am tipping that this change could take many, many years to be completed, perhaps it is safe to say that it is an evolutionary concept of the thinking processes. It may take 20, 30, or even 40 years, it could take the greater part of the current millennium, when all the changes have been effected there will be Peace on Earth, because mankind will have learned the lessons of this millennium which are Patience, Sharing, Caring, Communication, Consideration and Co-operation, for and with our fellow man. Sensitivity, Hypersensitivity, and Anxiety will continue to be prevalent, throughout this entire millennium and then mankind will enter into a time of great Creativity and Enjoyment of the Pleasures of Life, the Millennium beginning with 3001.

The so-called U6 measure of unemployment in the USA has increased from 13.5 to 17.3% in 5 years. Is this really so dramatic a disaster as it is painted?

As America remains mired in recession there are some ominous threats emanating from the Pentagon.

Now Iran is being threatened.

Let us hope that President Obama has the power and determination to restrain the US military industrial complex from seeking a military solution to America's economic problems.

The lack of economic literacy on this board is astounding.

First, for the conservatives who blame minorities for the housing crisis: Unfortunately for you, data collected regarding the Community Reinvestment Act shows that the minorities who borrow under this program have a high repayment rate. More importantly, the real issue is that banks knew the mortgages they sold were federally insured and would later be bundled into securities (read, turned into an asset they could sell and have removed off their books completely as a liability). It was the BANKS who accepted crappy documentation - why? - because they were going to make a profit either way - as the consumer repaid the debt or when the mortgage was bundled into a security and sold.

For the far-right loonies: Returning to a gold standard is a ROMANTIC FICTION. There is not enough gold in this world to back up global economic activity. Even if you use an assortment of metals, the monetary peg would cause economic growth to permanently come to a standstill (about 1.5-2% annually). In that situation, are you ready for a one-child policy? How about technological progress at a snails pace? Or, how about a hyper Dickensian society?

For the left: I'm sorry but we cannot continuing funding everything and anything. Cuts have to be made and they going to have to be deep. We also have to start taking a firm stand about how many people can ACTUALLY enter this country.

For everyone: 70+% of the Federal Budget is stuck in entitlement programs or required spending - Medicaid, Medicare, Social Security, interest payments on our debt. Another 20% is spent on national security and defense issues. Where do you want to start cutting?

Sorry everyone: TAXES HAVE TO GO UP. Even if we cut the Dept of Education, HHS, Transportation, NEA, and any other dept conservatives like to complain about, we still cannot afford this country on our current revenue base. We could try cutting ALL social entitlement programs (Medicaid, Medicare, Social Security) - frankly, that's a horrible idea. Or, we can just default on our debts. You choose...

I have a question: why is it that the stock market keeps going up? Where are the fundamentals? Who's buying? ... http://abcnews.go.com/Business/wireStory?id=9515139


To follow-up on AEP's point: Has anyone looked at the growth of money, particularly M1 and M2 over the last 40 years?

Why has the middle class been decimated economically over this period?

Why is our economy so geared to consumer spending and low-paying service sector jobs.

The details strongly suggest that our society has been out of whack for quite some time (including under Reagan). The coup is here. If your busy posting on this board, you're not a part of it. You're an outsider. America was never your country, you just lived here. You're pretty much like the rest of us - chattel enjoying the grass.

Happy New Year! May 2010 be a year to remember!

"Isn't the only hope for the planet that the industrialized civilizations collapse? Isn't it our responsibility to bring about?" -
-- Maurice Strong


"'Today we are again witnessing the emergence of transnational elites ... [Whose] ties cut across national boundaries ... It is likely that before long the social elites of most of the more advanced countries will be highly internationalist or globalist in spirit and outlook ... The nation-state is gradually yielding its sovereignty ... Further progress will require greater American sacrifices. More intensive efforts to shape a new world monetary structure will have to be undertaken, with some consequent risk to the present relatively favorable American position"

"The technetronic era involves the gradual appearance of a more controlled society. Such a society would be dominated by an elite, unrestrained by traditional values. Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen. These files will be subject to instantaneous retrieval by the authorities"

-Zbigniew Brzezinski (written 40 years ago)

Still think this all happened by chance? the collapse of america was always planned to usher in the UN world goverment.

See also Wildlands project and agenda 21.. Goverments were infiltrated and taken over along time ago.

do you really think that this is the first time that you people have acted ruinously??
So what life goes on and on, dont worry be happy

thanks to obama, america's
economy has morphed into a
european style disaster. all
you euro obama supporters should
be proud

do you really think that this is the first time that you people have acted ruinously??
So what life goes on and on, dont worry be happy

IrvSwerve
on January 11, 2010
at 07:49 PM

"Couldn't finish this article as the creditability of the writer vanished when I found he couldn't spell the common word "seizure".


Those who live in glass houses etc. Who would have credited it?

Bruce V,

I'm a passionate advocate of the free market, as described by Adam Smith. It's a shame that modern capitalism has strayed so far from this vision, suffering distortions from misguided government intervention (the "Greenspan put", bailouts etc.), and from fiscal policy that serves to benefit zero-sum rent-seekers and speculators through the land market rather than genuine entrepreneurs. My outlook is more aligned with people such as Steve Keen and Fred Harrison than with Marx, whose ideas will not work given human nature so far as I can tell. (I also have some sympathy with Ron Paul, although I don't believe that pure libertarianism will work.)

"Therefore the benefit of my invested capital currently goes entirely to the renter and other renters in the area, as rents are now decreasing rapidly in my area."

But that was never your intention. If it is the case currently, it is because you made a bet that went wrong. Somebody who backed the wrong team to win is being disingenuous if they claim that their capital is being deployed in order to help bookmakers.

Are you American, btw? I doubt that a UK landlord would be benefitting his renters currently, unless he had been amazingly foolish in his purchases.

The lack of economic literacy on this board is astounding.

First, for the conservatives who blame minorities for the housing crisis: Unfortunately for you, data collected regarding the Community Reinvestment Act shows that the minorities who borrow under this program have a high repayment rate. More importantly, the real issue is that banks knew the mortgages they sold were federally insured and would later be bundled into securities (read, turned into an asset they could sell and have removed off their books completely as a liability). It was the BANKS who accepted crappy documentation - why? - because they were going to make a profit either way - as the consumer repaid the debt or when the mortgage was bundled into a security and sold.

For the far-right loonies: Returning to a gold standard is a ROMANTIC FICTION. There is not enough gold in this world to back up global economic activity. Even if you use an assortment of metals, the monetary peg would cause economic growth to permanently come to a standstill (about 1.5-2% annually). In that situation, are you ready for a one-child policy? How about technological progress at a snails pace? Or, how about a hyper Dickensian society?

For the left: I'm sorry but we cannot continuing funding everything and anything. Cuts have to be made and they going to have to be deep. We also have to start taking a firm stand about how many people can ACTUALLY enter this country.

For everyone: 70+% of the Federal Budget is stuck in entitlement programs or required spending - Medicaid, Medicare, Social Security, interest payments on our debt. Another 20% is spent on national security and defense issues. Where do you want to start cutting?

Sorry everyone: TAXES HAVE TO GO UP. Even if we cut the Dept of Education, HHS, Transportation, NEA, and any other dept conservatives like to complain about, we still cannot afford this country on our current revenue base. We could try cutting ALL social entitlement programs (Medicaid, Medicare, Social Security) - frankly, that's a horrible idea. Or, we can just default on our debts. You choose...

I have a question: why is it that the stock market keeps going up? Where are the fundamentals? Who's buying? ... http://abcnews.go.com/Business/wireStory?id=9515139


To follow-up on AEP's point: Has anyone looked at the growth of money, particularly M1 and M2 over the last 40 years?

Why has the middle class been decimated economically over this period?

Why is our economy so geared to consumer spending and low-paying service sector jobs.

The details strongly suggest that our society has been out of whack for quite some time (including under Reagan). The coup is here. If your busy posting on this board, you're not a part of it. You're an outsider. America was never your country, you just lived here. You're pretty much like the rest of us - chattel enjoying the grass.

Happy New Year! May 2010 be a year to remember!

The United States is not quite there yet...When the people figure it out..there will be a revolution here that will make all the wars in the last hundred years look like a Boy Scout Camp...and there will be much blood shead.

mauibucky, I would rather pay $5 for a t-shirt made in Bangladesh than $25 for a t-shirt which provides free advertising for Nike.

It is called, looking for a bargain.

Oh, and Drudgetard, your comment at on January 11, 2010
at 08:17 PM speaks to a small mind. The people posting here do more than pay lip service to
"Bias" & "Arrogance" by Bernard
Goldberg. For Goldberg knows that the business of the media
is to provide what it thinks its audience wants. When that is made toxic by the fallacious
reasoning of the gatekeepers thinking they are reasonable, thereby anyone who agrees with them is reasonable, and those who disagree are unreasonable - they see what you do not want
to see.

The writer just doesn't understand how anyone can be excited about the upcoming inflation? Really? Well, he will probably have a heart attack when HYPERinflation rears its head this year or next!

Our government is throwing fiat money out of airplanes. The printing presses our over-heating. The debt WILL NEVER be repaid. The Fed is buying our own debt. And the writer doesn't think inflation is going to be a problem?????

Folks - get ready. You ain't seen nuthin' yet!

do you really think that this is the first time that you people have acted ruinously??
So what life goes on and on, dont worry be happy

Ambrose- good article: pls more like these expanding on the topics. The Congress and Treasury bought time and delayed a multi-part crisis but did not remove or even affect the severe underling problems. Trust is gone in America and will not return anytime soon. Obama's healthcare initiative is one big fuse-fizzle that addressed almost none of the necessary substance... and this is supposed to be his grand coup.

" "A roaring US recovery is underway" according to today's Times.

Is the glass half full or half empty? The answer seems to depend on who you ask."

Well, I certainly wouldn't ask The Times. Their economic journalists are, broadly, terrible. David Smith and Anatole Kaletsky in particular were cheerleaders to the last for Britain's economic miracle under Labour, and for the UK housing market. They are rear vision mirror economists of the worst kind, although Kaletsky also engages in predictions that are so uniformly incorrect that he is an indispensable commentator for any investor.

It is even worse than the 17.3pc reported in this article. One year after "dropping out" of job-seeking and being listed on the discouraged worker roll, unemployed workers disappear completely from official statistics and vanish into some sort of administrative Limbo.

If you include this backlog of uncounted, discouraged workers who left the job market more than one year ago and have quit looking until the job market improves, then the current American unemployment rate is actually 21.9pc

21.9pc, not 17.3pc and certainly not the 10.0pc the Obama administration is cheerfully reporting.

All of these discouraged workers used to be included on the official statistics prior to a change in the reporting format in 1993. While that took place under Mr. Clinton, Mr. Bush was quite happy to continue the procedure and allow an artificially lower unemployment number to make his administration look better than it actually was. The policies of both Clinton and Bush set the stage for this global disaster.

Shadow Government Statistics lays out the sad details on the real number of American unemployed, for those who want to check it: http://www.shadowstats.com/ as do other economists.

This is not a jobless recovery with "stagflation" looming as was the case under Mr. Carter. This is 1930 all over again, with the worst yet to come.

John Mack: I have invested some of my hard earned wages in various investment properties.

With most of the rentals I own the income is just enought to pay the mortgage and property taxes. Therefore the benefit of my invested capital currently goes entirely to the renter and other renters in the area, as rents are now decreasing rapidly in my area.

It's laughable to read John Mack's Marxist comments ... "landlords do not provide a service. They use capital to intercept an existing asset whose supply has been curtailed, and then use a de facto monopoly position to extract rents." I'm not sure which School of Socialism you just graduated from, however the current real estate market is exactly the opposite as you have described.

China doesn't want a shooting war with the USA or anyone else. They believe in winning without bloodshed whenever possible and they will fight the USA asymmetrically -- much like the US brought down the Soviet Union. For the average American Joe, this is a bad thing. For our super-rich oligarchs, it doesn't matter. They have the financial means to escape the madness they have wrought.

Yes, I really enjoy being lectured by that ex colonial power, Great "400 Years of Global Oppression" Britain!

Recently the Pentagon put in a request to have the National Guard, constituted of state militias, put under federal control. Anyone who knows the first thing about US history and politics will know the significance of this. Why? For the same reason that the British police have been armed with tasers. They know what's coming and they're getting nervous about it.

Charles Lee....

I read Jim B.
on January 11, 2010
at 06:50 PM .....

NOT your initial comment, although obviously I did see your short response. I very rarely read what you say as a quick scan shows you continue to write fantasy drivel which invariably revolves around a new dollar, alleged USA military superiority blab blah blah. When you do some research I may read your posts again, however, with your attitude I expect that this will never happen. Lalah land is where you exist.

Ambrose-

“Thank you” for writing truths... many Americans look forward to your weekly columns... which are a life line in a sea of American darkness.

Again... ”Thanks!”

It is even worse than the 17.3pc reported in this article. One year after "dropping out" of job-seeking and being listed on the discouraged worker roll, unemployed workers disappear completely from official statistics and vanish into some sort of administrative Limbo.

If you include this backlog of uncounted, discouraged workers who left the job market more than one year ago and have quit looking until the job market improves, then the current American unemployment rate is actually 21.9pc

21.9pc, not 17.3pc and certainly not the 10.0pc the Obama administration is cheerfully reporting.

All of these discouraged workers used to be included on the official statistics prior to a change in the reporting format in 1993. While that took place under Mr. Clinton, Mr. Bush was quite happy to continue the procedure and allow an artificially lower unemployment number to make his administration look better than it actually was. The policies of both Clinton and Bush set the stage for this global disaster.

Shadow Government Statistics lays out the sad details on the real number of American unemployed, for those who want to check it: http://www.shadowstats.com/ as do other economists.

This is not a jobless recovery with "stagflation" looming as was the case under Mr. Carter. This is 1930 all over again, with the worst yet to come.

This entire crisis was formulatd by the Federal Gov in their Community Reinvestment Act of 1978, furthered by the Clinton moves to lower requirements and helped along by a congress who failed to act.

The Obama group is doing nothing to ease the situation, in fact, is fueling the fire hoping to overwhelm the system using the advanced socialist ideas of Cloward and Piven, two radicals from Columbia University who fist had their sights set on the welfare economy and nearly broke the back of New York.

When you have banks receiving Fed funds at a .25 basis point and lending to for sure 3.0% return, how is money ever going to be funneled to the private sector.

Fed rates need to raise to 3-4% interest so they will actually start lending to good prospects and charging 6%. The economy will take off at that point if Obama care, Tax and Spend and the other punitive measures being proposed by this admin are squelched.

Let's see how Scott Brown does in Mass. There is a good chance, according to may pollsters, he may win. People are at their ends with the Dems.

-----------------------------------

To:Bruce Oksol, Charles Lee and "The sky, is in fact, falling"

Might I suggest a more upscale dinning environment... such as the French... "Mac Donalds", La "Burger King" or the German... "Hardys" and for more of an international taste there's always... "Taco Bell."

Gentlemen, eat where real Americans dine... where food stamps are accepted as cash... and where some Americans families now wish... just wish... they had enough extra cash to go... once or twice a "year."

Is this another episode of... "Let them eat cake" ????

I don't think so...they can't afford it.

You better take this Depression seriously as Americans buy over 40% of what China makes and 30% of everything the World produces. Think about that? "Think?"

So when the manure hits the fan... "you and the rest of the World will be there to catch it."

-----------------------------------

the world bank (read richest persons, look it up dunderheads) caused the first stock market crash, jeez you think they might have something to do with this one too. Why am I wasting words? I just don't know.

The fact that money multiplier doesn’t work, that it doesn’t reach people and stay in the banks’ system is the great failure of Mr Bernanke.
Probably it would have been much better to avoid all this waste of money and to transform instead mortgages in equities and cut massively taxes to people who are in the worst conditions.
But these economists find very hard to get that in the economic game there may be psycological issues and not rational behaviors as well.

Repeat ... all five bank owned homes were sold this past spring into summer to families with no money down. 3 of those houses are back on the market this winter.
The other 2 may be up for sale soon along with several others. I have sev3eral neighbors saying that owning a home isn't worth the added taxes.

Columbus, OH.

@Chelyabinsk

That reads like an accurate and objective analysis to me.

"Conservatives "complain" about not being able to KEEP more of what they EARN."

No. Conservatives complain about not being able to KEEP more of what they HAVE, not necessarily what they EARN. Many rich people (by no means all) are specialists in extracting unearned income from others, most obviously as property landlords, but also through other forms of rent-seeking.

I'm all for people keeping what they've earned. But too many wealthy people delude themselves that they've actually earned their money. By "earned" I mean "provided goods and services demanded by the market". And, no, most landlords do not provide a service. They use capital to intercept an existing asset whose supply has been curtailed, and then use a de facto monopoly position to extract rents.

"I am glad you at least have come to realise what complete and utter garbage Charles Lee continues to write."

Glad to see that you're still reading my contributions, D.Rumsfeld.
I'm sure you told Telegraph bloggers a little while ago that you wouldn't be doing that, ever again....

This isn't possible!!!!
Obama the Omnipotent told us things were on the right track just a short time ago.
Guess Bill Clinton was correct--Barry is way in over his head--gee didn't most of us know that!
Should be relegated to serving coffee.

IrvSwerve writes:
Couldn't finish this article as the creditability of the writer vanished when I found he couldn't spell the common word "seizure".
------------------------
Too bad you can't spell 'credibility'.

I love this quote..."The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens."

The word tithe means a 10th. So how can 1pc be a 10th? Crack journalism once again.

I'm on the verge of losing everything I have worked for... it doesn't matter anymore if one is skilled when there are no jobs.

Both parties are corrupted beyond repair and I place blame for this mess at their feet. Our rights have been trampled on for years on end, elections do nothing to change things and our representatives no longer care nor work for us.

Maybe it is time for revolt... what do we have without or freedom or our ability to provide for our families? Today we are all nothing more than slaves to the bureaucrats and corporate vampires that inhabit Washington.

The groundwork for this depression has been laid down for years. It's called " Globalization". The sociopathic capitalists have been " outsourcing " jobs to 3rd world countries for years, while at the same time weakening the power of the labor unions, starting with the Air Traffic Controllers under Reagan back in the early 80's. They always claim their ONLY obligation is to their shareholdrs. What the sociopaths forgot is the goods their companies were producing in the 3rd world countries were being consumed by the middle class in the developed countires that they were destroying over time. Now the tipping point has been reached- and this depression will not go away until the sociopaths are eliminated.

Jim B.
on January 11, 2010
at 06:50 PM

I am glad you at least have come to realise what complete and utter garbage Charles Lee continues to write.

You can always tell when that moron Matt Drudge links to a story. The comments get filled with incoherent lunatic rantings from the most ignorant people in the world, spewing crap about Marxism and Bible codes.

For Jim B:

"Our debt to China alone is only about 800 billion"

"Billion".
Such a comfortable little word isn't it, Jim?
America only owes China (at the moment)
$1,000,000,000,000 (don't forget the Hong Kong component.)
It only owes the Japanese $750,000,000,000.
Chump change!

TonyW "Reading the comments from Americans makes me groan and laugh alternately. They fervently blame the political party that they don't support, not realising that it is a hydra - one beast with slightly different heads. Hey wake up people, don't you realise both political parties have been bought a long time ago."

Tony,

A few of us see this truth.

Wallstreet isn't improving, the dollar lost 33% value, and the market climbed 19%, that is a formula for decreased wealth. Gold value increased 40%, which matches the loss of value of the dollar.

What Obama and the idiots, as compared to the other corrupt party, have created is the playing field for a perfect storm. Watch the revival of the misery index: unemployement, inflation, increased taxation.

Hats off to OBAMA - the wrong President at the worst time, and to Bush - the mumbler in chief who set the stage for OBAMA. The combination of these two has set the stage for the waning of the American republic, and the fall of the West. Bad people with questionable intentions and very little intelligence.

Couldn't finish this article as the creditability of the writer vanished when I found he couldn't spell the common word "seizure".

For Rob Dentry:

"Who would not want to trade with New America?
Who could challenge the default, militarily?

One word - China"

If China refuses to trade with America vast swaithes of its factories will have to be closed and unemployment would be colossal.

China does not have the military muscle to challenge America in war.

http://www.youtube.com/watch?v=w11xRazkYnE

Many years ago there was an American social comentator/ cartoonist by the name of Walt Kelly who had one of his characters observe "We have met the enemy and he is us."
Following WW II, Americans came to expect an ever growing standard of living. Eventually this expectation morphed into a sense of entitlement, especially among those who never felt the sting of real hardship such as the survivors of the Depression. My grandparents lived by the maxim " use it up, wear it out, make it do, or do without." Those who followed them came to find the concept "quaint." You had money or access to credit so there was no reason to make do. A simple home was not enough, we should all aspire to own as close to manor house as our money and credit would allow, after all we deserved it. And if you were too poor to buy a house, had credit that wouldn't buy you a coffee, well the goverment could help. Put enough pressure on lenders by issuing veiled threats of legal action under the Equal Housing Opportunity Act. Encourage them to find creative mortgage instruments and allow them to unload the often worthless paper on unsupecting suckers, er, investors, them sit back and point fingers at "greedy bankers, et al." Let's not let off the real estate brokers who knew that the clients they were selling houses to were unqualified financially to buy a house, or the builders and developers who stoked the fire by bringing properties to a market that was really a giant ponzi scheme.
So the credit system implodes upon the inevitable discovery that a massive chunk of it receivables are uncollectable and secured by properties governed by the legal maxim that the value of thing is what that thing will bring. In a collapsing housing market, that's going to be a lot less than what you have in it.
Of course a lot of money had made been generated on the road to the credit industy's Waterloo. Money that bought a lot of nice doo-dads like i-phones and 60 inch TVs, winter vacations in tropical tourist traps, hot cars, designer duds, not to mention overpriced coffee at Starbucks. And people were happy right up until the layoffs began. Now as they drink Folgers from a chipped cup, they scream that the government sold the country down the river. And yes, the government did and continues to do so. But folks, if you want to see who is ultimately responsible, look in a mirror. Americans have been living beyond their means at least since the late eighties. The boomers started the ball rolling as they realized that filet mignon was much tastier than hamburger (or granola for that matter,)and traded in cheap jeans and t-shirts for Calvin Klein and Armani. The X'ers and Y's, like the Stones once said of American girls, came to "want everything in the world that they can possibly imagine." We saved little and spent much. Not enough cash? Credit was cheap and easy. Max the cards and take out a second or third mortgage to pay off the plastic and the cars in the driveway. My Grandparents would never have put their homes at risk for trinkets, bout houses weren't homes anymore, they were investments. Taking money out of your equity was like pulling it out of a savings account. You owed it to yourself to live the good life. As an American your entitled, right? Well folks, as a certain Reverend observed, the chickens are roosting now.

The goal here is to destroy America because it is a thorn in the side of the forming of the world government system. Watch and learn.......99% of the people in government, the press, and wall street are all in on it. Tell me how the housing problem in the US caused this trouble in every nation? Go ahead, live with your head in the sand. Remember even Christ told you this was coming 2000 years ago.These people are trying to bring their god(the son of satan) into power just as Christ said so long ago.
"Its a big idea, a new world order"
George Bush -- Sept. 11, 1991(10 years to the day before 911 and not by chance)

Ambrose - the real story comes out when 'figgers' are put with facts.
Its worse here than most realize, because the US Media are willingly covering it up, instead of carefully parcelling the bad out with the good. WHen it does hit, this will magnify the panic.

My bank is in a severe panic inside, and they are on paper, solvent.

Im sure the Fed will try and raise interest rates, or at least Obama will attempt to pressure it as he's out of guesses. Who is going to borrow?

The recovery is a bald-faced lie. "Recovery" means going back to the initial state and now with the admission of 7M jobs permanently lost, recovery is dashed for Im guessing 10 years or more.

The US/world economy was based on business expansion solely on credit which rased price levels to where people/businesses had to use credit to buy such goods and services as were produced under credit. Now that credit is gone...

I remember Americans balking at the idea under Jimmy Carter of "wage and price controls." Looks like we've got them now.

Ray gets it !!!!!

Kudos Ray !!!

End the FED and cut this govts legs off just below the hip where the FOUNDERS started it.

Excepting Hamilton the little elite merchant and bankster whore & traitor to freedom FROM Govt. He was America's first fascist. And today's have Jefferson rolling in his grave.

To:Bruce Oksol and Charles Lee

Carabbas is excellent, far superior to Olive Garden. I would also try Macaroni Grill if you are looking for upscale middle class dining.

Looks can be deceiving.

The more people you put out of work is less expenditure for the company therefore the bottom line of the company rises, fast.

If you can get enough conspirators to lay off enough people you can create the illusion (on Wall Street) that the economy is mending and use the numbers to prove it though it is all FALSE.

Any perceived prosperity is for the company doing the lay offs and not the citizenry.

Just how long can you maintain the illusion of economic recovery by laying people off?

The situation will implode and is the critical element in fomenting economic collapse because when the people become so unemployed and so lacking in money everything collapses into a Depression which has never been witnessed before.

I think that's what they want since why else go about such a practice?

Reading the comments from Americans makes me groan and laugh alternately. They fervently blame the political party that they don't support, not realising that it is a hydra - one beast with slightly different heads. Hey wake up people, don't you realise both political parties have been bought a long time ago. Donations are made to both parties by corporates and there is a revolving door for jobs especially with Wall Street. Look at the amount of money required to get and stay elected and think how can this encourage independent thought??

Here's a few quotes to get you thinking.
"It is difficult to get a man to understand something when his salary depends on his not understanding it." Upton Sinclair
“No one in this world has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.” H.L. Mencken
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." -Cicero - 55 BC
"Banking Establishments Are More Dangerous Than Standing Armies." Thomas Jefferson (1743-1826), 3rd US President
A government which robs Peter to pay Paul can always depend on the support of Paul.
George Bernard Shaw.
Hey, Mr. Congressman, is that your suitcase full of cash under the table? Must be, it’s not mine! More champagne? Me.
Think if the future of all human civilisation depended on me, what would I do, how would I be?
It's up to us to write what happens next.
Your planet needs you. Me.

For COMPLETE and TOTAL insight on this topic DO yourself a favor and GOOGLE " Fall of The Republic HQ" and feast your eyes on SOME UNVARNISHED ...TRUTH!

moonmac -

So mortage companies that gave away "free" mortgages to people they knew did not meet income requirements, had no income documentation and asked for zero money down don't bear most of the blame?

Especially when the buyers were told "we know the mortgage is steep, but the market is so good you can turn around and sell your house before your loan resets in a few years".

Then the lenders turned around and treated the mortgage money like the biggest pyramid scheme/vegas craps table in the history of man?

Yeah..those reckless buyers. Of course they are losing their home, have probably gone through tremendous financial hardships to bring them to this place, and their credit will be destroyed (try getting even an apartment lease with 300 credit after a foreclosure). Those evil freeloading home buyers!!

Bashing all Americans for what the international banking industry has done to us would be like Americans bashing the British for renegging on loans the American tax payer gave us after WWII and the 1970's. They are NOT all loud mouthed or selfish. All it takes is for you to go over there outside of the 'tourist traps' of florida and Las Vegas and see for yourself.

A writer (Charles Lee) asks, "...Who would not want to get their hands on the New Dollar?
Who would not want to trade with New America?
Who could challenge the default, militarily?

One word - China

He goes on to say, "...America should free itself from the shackles of the past...."
I say, "Only to not have learned from the past and to be doomed by the future?
Have any of us learned that you can not do this in either your private life or by the publically elected officials and come away unscathed? It was the great bard himself that said, "Neither a borrower nor a lender be..."

Arguably, yes, Bush policies helped us into the gutters of finance. However, this does not give Obama a free hand with every wild socialist idea, either. Obama is a different cat. He plays a head game, he is a Marxist, he doesn't want to destroy this country's economy, he wants to pass laws that destroy the economy. He wants somebody/something to scapegoat. Obama will preside as this country goes down the tubes, there is no doubt. W was a nightmare, Obama seeks to be the Godzilla of Marxism, a one world guy who wants to be part of the ruling aristocracy. The Indonesian Muslim is a disgrace, easily the worst unAmerican president in history. Jimmah Carter, step aside, Obama Pol Pot has made the scene.

Charles Lee,

Congrats on the most ridiculous post of the day. You do realize that most U.S. debt is internal? We cannot default on that, unless you want your own treasuries and mutual funds to be defaulted on. Our debt to China alone is only about 800 billion. Do you mean defaulting on Brazilian, European and British debt as well?

Good luck finding Americans to work at wages low enough to keep providing our cheap shoes, polyester clothing and television sets at the prices we've been used to. Glad you won't mind paying $3000 for a DVD player.

Even in the 1930s with 25% out of work that meant that the rest were still employed. Currently if you're working and have no debt then you can live off the fat of the land -- assuming you have neither a conscience nor any care for the quality of life in the future.

I notice that we've still got posters that refer to Obama, the Democrats and the like as Marxists. No, they're not. Marxists are the people who are running China. The best description of what we've got is the person who described the two parties as "big war / small welfare" versus "big welfare / small war" -- essentially our government is captured by interests and the fight is over who gets the spoils (leaving the ordinary people to fend for themselves).

All of you championing the potential downfall of American and capitalism had best take a long hard look at just how much money our nation gives to other nations - including Europe- in order to prop them up.

http://www.state.gov/f/releases/iab/fy2009cbj/

Without America and capitalism the entire world fails to thrive that includes our "enlightened" European brothers.

"Of course Goldman Sachs doesn't care"

Goldman Sachs cares only about money.
It is at the heart of every bubble since the Second World War.
I invite everyone to put the words "Goldman Sachs" and "bubble" into the Google search panel.
I view this company as a wholly evil entity.
St Paul might well have been thinking about Goldman Sachs when he said "The love of money is the root of all evil."

Interesting article. It appears we may really be in for a big adjustment this time around.

I think almost every comment here is from an American. Do they even know that the Telegraph is a UK newspaper?

Whilst Emperor Bush and his cronies like Cheney were handing out (well not stopping them being handed out which is the same thing) loans and mortgages to any bozo who wanted one to buy American Dream goods (Boats SUV's Big TV's and BBQ's) the people were happy. So happy they did not notice nor care how much they were being ripped off. Illegal wars around the world being invoiced at massively inflated prices by the likes of Haliburton. Schools closing so US kids do not get an education (which they don't want anyway). Infrastructure like bridges collapsing in Minnesota or levees giving way in Louisiana.

Just where do you think all this so called stimulus money is coming from. It is just delaying the inevitable collapse. You have borrowed money you don't have, secured on assets that do not exist to buy crap from China that you did not need. If you have money the US is a great place to be but if you do not I'm not sure where could be worse. It is gonna get a lot lot worse before it gets better. Unfortunately the UK lead by Blair and now Brown are only a few steps behind you. Blair, Bush, Cheney now magnificently wealthy (bush always was but now more so). What is funny is that you are all pointing the finger at Obama for every thing that is wrong and the man has only been in office for a year. No wonder most of you can be ripped off so easily.

marxbites writes: "Govt produces nothing."

This is easily disproven. Although it seems likely that no amount of persuasive argument is likely to help someone with the ideological perspective and apparent zeal of marxbite to understand what a government does produce....I am willing to try.

First, I have to agree with the idea that government is not very good at all at conceiving of innovative products and services or producing and delivering them cost effectively. That is not what government is for.

Governement is for providing a set of rules for society. These in turn provide basically two things, a sense of fairness, and a sense of stability. I'm talking about what government should do, not necessarily what it does at any given time.

Is government too big? Yes. Does the government try to involve itself in too many areas of our lives? Yes. Are there too many distortions imposed by government that unfairly reward one group and penalize another group? Yes. Is government absolutely essential for national security, criminal law, legal and regulatory frameworks for commerce, organizing those items of common use that do not lend themselves to private ownership, being the advocate for a reasonable division of economic reward for productivity between labor and capital? Yes to all. Although, many of these principles get so badly distorted and stretched at times that fairness goes out the window and productivity and investment are discouraged to all of our detriment.

Government is essential in a complex modern society.... no matter how much some might pine for a simpler time.

Great plan to bail out people that bought over priced homes they couldn't afford. Some are getting 2 years free rent & once they finally get evicted they will just buy another house & do it all over again! This country is a JOKE!

We live in Virginia and have been trying to modify our mortgage since last April, when my wife lost her job. We qualify to the letter under the Making Home Affordable program. All we have gotten is the run around. Banks DON'T want to modify. They DON'T want to short sell. They just want to foreclose on you, and resell at some price that is far worse than the short sell price. It defies logic, but this is what is going on all over America right now.

The global economy is the only one which raises living standards around the world, but the current problem is that massive unused liquidity cannot be accessed as it is private property. Money is the only conduit for our energy within an economy and we have to find a way to use the Money which does circulate in the working economy in a more productive way. Everyone, not just the taxpayer, must help.
My bet is that a quarter of one per cent Senders overseas bank transaction tax will come into force as QE cannot continue into the fog-bound future.

For Bruce Oksol:

"We had a 20-minute wait on a Tuesday night for Olive Garden, a moderate-upscale restaurant"

I've been taking holidays in America since 1987, Bruce, and I have to say that I wouldn't queue for 20 minutes to eat at a branch of Olive Garden.
Now Carabbas - that's a different matter.
Perhaps you don't have this restaurant in California.

Yeah, Mr.AEP
Have you ever had anything good to say about US ?
No, not really, seditious remarks and jealousy are clouding your beautiful mind "sir". Of course EU, UK, China and every other country that you rave about are better position economically than US, and you know why? Well, because all the problems in the world are expected to be resolved by us the depress Americans.
Thanks a bunch, Professor AEP, for you brilliant analysis of US economy.

The very, very best solution for America would be to default on all the vast foreign debt that endless generations of Americans have built up and begin again with the New Dollar.
With America's vast natural resources, huge (still) industrial base, technological advantages and innovative and enterprising people you would, without debt, become a truly colossal world power.
Who would not want to get their hands on the New Dollar?
Who would not want to trade with New America?
Who could challenge the default, militarily?
America should free itself from the shackles of the past.

Perhaps you'll be kind to Britain, with its vast investment in US Treasuries.

--------------------------------

This is what happened to America---

What Greenspan, Bernanke, most economists, Bush & Obama Administrations, Fed and Wall Street didn't see coming and still can't see is American labor and wages have been "debased." The Neoconservatives, Republican Congresses, a few stupid Democrats and Regan & Bush Administrations for years changed existing laws, legislated tax breaks for corporations and the Elitist top 1% of Americans at the expense of the other 99%. Couple this with a catalyst such as the collapse of the mortgage banking industry & housing prices, a liquidity crisis and pending credit card catastrophe. Then add in years of Union busting, NAFTA, CAFTA, Vietnamese, Central America and other Trade agreements, hundreds of thousands of H1-B & L-1 work visas, years of outsourcing jobs to 3rd world countries and open borders all which help eliminate the higher paying jobs, pensions and benefits for a majority of Americans. This was the foundation our economy was built on and now it's gone. The huge amount of spendable income/benefits these high paying jobs formerly supplied America and the World Economy has disappeared... gone forever. Resulting in a gigantic transfer of wealth from average Americans to the World's Elitist top 1% and coffers of Corporate America.

America and many of the World economies are now headed towards a depression. Many European countries will exit the depression years before America do to economies based upon higher paying manufacturing jobs providing pensions, social programs and other benefits for their citizens. Unfortunately the Neoconservatives, Republicans, Elitist top 1% and Wall Street outsourced American Industry to 3rd world countries. Therefore, American will spend years rebuilding its "former" self. Its industrial based economy that for sixty plus years provided most Americans with a high standard of living, benefits and plenty of excess cash to spend "buying 30% of the worlds manufactured products."

The above listed events which, occurred under Greenspand and his understudy Bernanke, have now placed America on the road to bankruptcy with the largest national debt, and growing, in the history of the free World. America's new Service Industry based economy with its low paying jobs, no pensions or benefits will turn this recession into a depression... lasting years.

The Neoconservative Bush Administration for years cooked the books concerning GDP, employment, inflation and other numbers released monthly by the US Bureau of Labor Statistics and now Obama carries forward the same practice. So America's real inflation is actually double digit, unemployment 6.5% higher than it actually is and the GDP has been minus for 3 or 4 years. What do these errors mean to the US Economy... it's "totally screwed?" Plus the Bush and Obama Administrations gave control of the US Government to Wall Street and investment banking... and then gave them $12.5 trillion of the taxpayer's money with an opened ended commitment to do and pay anything they want. Both Administrations allowed investment banks and other big corporations to privatize profits and socialize losses... which in the end will destroy the US Economy.

As Hitler did during World War II, the Bush Administration utilized "Authoritarian Rule" and the "big lie theory"... the bigger the lie the more likely people will believe it and the Obama Administration carries foreword the same practice.

The American Economy was "debased" while our political system went from Democracy to Corporatism, that's "Fascism" folks. Remember, the hedge fund, mortgage and banking liquidity crisis, soon to be a solvency crisis, is just a "catalyst".

Wake up people the Elitist run World Banks, Investment Banking, Federal Reserve, Bush & Obama Administrations and Necon-Republicans make the mafia look like a bunch of boy scouts.

--------------------------------

Many in the US are awakening to the fact that Obama is merely another corrupt corporatist.
I am curious what you Europeans think of him now?

You'll find these vermin have absolutely no loyalty to the public who saved their a$$es and no sense of spiting consumers. WHO do they think is going to BUY THEIR CRAP when no ones's working? Foreclose on their businesses NOW like they are doing!
..and Obamalama thinks these vermin are the top of their class? More like the bottom slime in the barrel.
Hoo Boy! If I were president for one year... First thing up; Institute the Fair tax, and eliminate the IRS. Bring BACK the jobs to America, by correcting the tax structure penalizing business investment. Second; stop deficit spending, and bailouts.
Third;No more than two terms for ANY public office and NO PENSION benefits either once out of office.
While I'm at it...I'd end the cash cow drug war and the associated black market and violence. Make the Fed a public bank rather than a private lending institution for the wealthy. Put an end to Fannie and Freddie's mismanagement by installing fiscally conservative libertarians.

Ambrose,

Shame on you!! Stop scaring the lower orders like this. Judging by all these nonsensical posts, you've opened up a hornets nest of nutters and wackos.

Enough of your 'the sky is falling' articles. How about something positive for a change, instead of doom and gloom.

The the gentleman who says what he reads does not match what he sees when he goes out and witnesses crowds waiting to be seated at an Olive Garden; it matches perfectly. History teaches us that in economic downturns it is the entertainment industry does well. People who can't buy cars, houses and big ticket items will go to movies and out to eat instead. It is grim here and getting worse. Our government is fixated on raising energy costs, making sure health care takes ever larger chunks of our money and apportioning a massive chunk of the American economic pie to government. It will continue to spiral downward until total collapse results unless a massive u-turn in policy is initiated quickly. That ISN'T going to happen with this cabal of committed Marxists in power. They will ride the pony all the way across the finish line, no matter what. I don't even pretend to understand the strategy. How do they think they are going to maintain power like this?

It is amazing the absolute ignorance of capitalism by socialist spewing class-warfare thugs who blame everything on people - ie - human nature. I challenge each and every one who blames our economic mess on the darker side of human nature to read "Wealth of Nations" and then "Free to Choose." And finally, to objectively examine government policy prior, during (the length as well), and after a recession (including the Great Depression) which would be of course, the recovery. I realize that critical thinking is taxing for some, but give it a try anyway.

Solution is obvious for America:

Vote the Marxist Communist Democrats out and vote the Constitutionalists
and Free Market Enterprising Entrepreneurial Freedom and Liberty lovers in...

We have given up too many of our rights and incomes for way too many decades in the name of Security,
Public Safety, The environment, Health care, The children, and most recently Global Warming (what a fraud), and any other
cause they dream up to motivate us into surrendering what is our God given rights.

Evict all teachers and university professors from our educational system and main stream media
that are indoctrinating our citizenry into Communism, Marxism, and Socialism. Eliminate over
taxation of individual wealth by eliminating the death tax, income tax, capital gains tax, electricity tax,
water tax, telephone tax, internet tax, gas tax, natural gas tax, road taxes, and all consumption sales taxes, et al.

Run the government on tariffs and taxation of foreign corporations and governments that wish to do business in our country.
Control government spending, Implement a balanced budget requirement, and revert back to the Gold standard.
Eliminate the IMF, WTO, NAFTA, GAFTA, IRS, the Federal Reserve, Medicare, Social Security, and all
government entitlements, welfare rolls, and waste fraud and abuse that make peoples dependent on said Governments. Payoff
the remaining government debt by selling off public lands.

End all foreign military entanglements, Eliminate gun controls on our citizens. Limit doing international trade to
those countries that have respect for human rights and like minded policies as our own. Stop employing the Communists
abroad because of the cheap labor. Secure our borders, and implement asimilation standards including a single language.
Promote multi-culturualism secondary to our American culture which should always come first.
Implement legal and tort reform by clearing the over burdensome legal system that favours an over burdensome and intrusive
government, and ban lawyers from ever holding public office. Ban government from competing directly with businesses
and individuals in which they regulate (conflicts of interest). Encourage freedom of religion, speech, and
true equality for all of our citizens.

In short, get back to those things that made this country an exception to all others in the name of the greater good of
man kind even if it means going it alone.

Don't tread on me, and let liberty and freedom ring....

Did I forget anything?

It drives me CRAZY to hear people on here talk about Obama and the Dems as if this could all be solved by voting Republican AGAIN!

How much will it take for you NUMBSKULLS to realize that they are BOTH the SAME?

Rs and Ds are just 2 sides of the same statist coin. One wants big wars and a little welfare and one wants big welfare and a little war. What in the name of GOD is the difference? Zilch.

Until the masses understand that government itself and the FEDERAL reserve are THE problem. And the ONLY soulution is to cut the government down to about 1/10 its current size, and END the Ferderal reserve, we are just one more step down the road to total collapse.

Vote FREEDOM, GOLD backsd money and VERY small government not party. If not we deserve what we get.

Americans deserve what's coming to them.

Loud, selfish, arrogant, superior & stupid they thought they were Kings of the World and acted like it.

It'll be good to see the US of A humbled but sad that the rest of the world will suffer too.

But at least when I travel from now on, there won't be those obnoxious, know-it-all yanks everywhere - they'll be home waiting for their food stamps to arrive in the mail.

What I read does not correspond to what I see.

In California where the housing market hit the hardest (along with Nevada and Arizona), restaurants are packed. We had a 20-minute wait on a Tuesday night for Olive Garden, a moderate-upscale restaurant that caters to the middle class who make up the bulk of our housing market.

Your article is the same I read everywhere in all mainstream media, but what I am reading does not match what I am seeing.

Since there is no frontier left, we have to stay put and fight to salvage what we can of our country. We start by voting the traitors out ! !

Of course Goldman Sachs doesn't care, they are getting all the bail out money, passed to them through AIG.

The biggest con of the last 40 years is the Dems who were behind the Fannie and Freddie melt down being able to blame everyone but themselves, get elected to even more power with the White House, Senate and Congress as a reward for torpedoing the economy, and then get the economy and money given to them and their corporate backers while saying they were the party of the "little guy."

This while printing money like 1920s Germany to ruin the worth of the savings out there.

The poor stay poor, because they can be used. The middle class (hated by anti "bourgeoise" Socialists and big money men fearing social mobility alike) get ruined, and the rich stay rich, and keep power in DC and Wall Street while using the alliance gov't and the big Goldman Sachs treasuries to drive competitors under. Plus GE-owned MSNBC, the mouthpiece of the administration and of Congress.

It all boils down to this:

Conservatives "complain" about not being able to KEEP more of what they EARN.

And Liberals "complain" about not being able to TAKE more of what OTHERS earn.

That is the TRUTH in a nutshell!

Gosh Ambrose, looks like you've touched a raw nerve in America this time. The inchoate sense of anger, betrayal and disillusion in the US expressed in these posts is palpable.

It is interesting to see that US citizens appear to be starved of information by the ubiquitous US media, which is all style and no content.

It's all a bit like Soviet Russia.

Regular followers of your column have never seen such outpourings when you have written about the EU and the Euro.

What does this presage for the US?

All you Americans posting on this site paint a very depressing picture of what's really happening in your country at present - I've just watched an old episode of Dallas and everything seems to be going really well over there in the US - our PM Brown says everything is A ok in England - so lets all stop worrying so much - mind you, the end is nigh

Americans can fight back and need to act now-

First thing all Americans should do is what Huffingtonpost.com recommends... "Move Their Money" out of the big banks and Wall Street brokerages (Goldman, JP Morgan Chase, BA, Citi bank, Wells Fargo etc.) into "local" banks, savings & loans, credit unions and brokerage accounts. If taken seriously this could place a heap of hurt on Elites, big banks, Wall Street and US Government.

Then email, call and tell your many friends about the "Move Your Money" plan and its web site at http://moveyourmoney.info

America "fight back" by moving your checking and savings accounts to local banks!! Also, you can take it one step further... refinance and move your home mortgage, personal and/or car loans.

Next thing Americans can do is organize protests... with a new twist. Americans need to make the protests personal by taking them to Wall Street investment and/or big bank CEO's, VP's and government officials "homes, churches and country club" etc. ... and their "adult kids & grandkids homes, colleges, schools and churches."

The Elites have made it personal by destroying American work places, wages and families. So it’s time to fight back... make it up close... and "real personal."

All Americans should... "Move your money" and "Protest"... now is the time to act!

Main street America is hurting real bad. The price of almost everything is going up and up. Gas prices, food prices, supermarket prices, insurance rates, "all kinds of fees", even commercial and residential rentals did not go down that much. The cost of doing "anything" at all for an average business is just unbearable - even harder to get a loan. There is no real incentive for any average business to invest and do anything at all, as your investment money will be eaten up by all the costs in no time... unless you have government connections or are in an area flooded with stimulus money. The only viable way to survive in the US now is through government handout + gaming the Wall Street. People are fearful and they do not believe this recovery is real. This country has lost its energy to think big and do big things... China built a 1000 mile gas pipeline from Turkmenistan to its border in 2 years, 600+ miles of world fastest 220 mph high speed rail in 3 years. It is almost 2 years and the CA Bay Bridge extension is still not completed will take another 3 year maybe....

I live in Michigan. Michigan is divided into 83 counties. The largest county, Wayne, published its yearly notice of foreclosures for failure to pay county tax, over 100 pages, just like last year, each item taking about a half inch or inch of print. Most list mortgages, but the banks are not paying the (easily paid)tax, preferring the county to assume these homes. Are tax foreclosures in the figures given? Auction drives price down

The OBama administration did not try frantically to save homes. Congress simply passed a new version of the Bush bill, which had so many strings attached few can qualify. A home at risk cannot have over 10 percent of MARKET value in second mortgage or equity loan. Since homes dropped in value, the equity loans are disqualifying applicants, as loans were taken out to cover unemployment losses. Brokers refinanced by transferring excess value of originaly mortgages into equity loans. I know one girl who sought obama refinance on a $50,000 home on a minimum wage job who was turned down. Homes in her area average 3 to 5 thousand now, so cheap drug dealers are buying homes for cash. The neighborhood has become a crime pit so no one will buy in. Another refuses to try to refinance her $100,000 home because the same home behind her lists at $50,000 and still not selling. This is the next wave coming, folk refusing to refinance because they are funding a home they can never sell on shrinkling wages. This is happening all over. Meanwhile, banks were given time before the Obama banking laws took effect to raise interest on credit card debt, and they did. 19 to 29 percent usury which will push the next wave. The credit card debt collapse is pending and it is gigantic

This mess has been a long time coming and each citizen has contributed to the morass. Greed and Capitalism go hand in hand.
Not one of us is free of the greed factor. Too bad we did not know how to put a cap on our own foibles and now want to place the blame on one man whom is frantically trying to keep us from sinking. Capitalism, in order to work, entails that each citizen be a responsible consumer. Is it responsible for a household to have multiple TV's, computers, bathrooms, while children sleep on the floor in freezing cold weather, here in Oklahoma. By and large we have been irresponsible. Our, only hope is to stop the devisiveness and join forces with friends, family, neighbors, and the current administation. Maybe it is just our turn to share the woes the world has felt while we gorged.
Individual responsibility is part of a collective consciousness. Prepare for the worst and expect the best.

High unemployment + money printing = Stagflation. Infaltion is a just another tax, and as the old saying goes only two thing in life are certain.....

Why are banks still holding on to forclosures?? Has anyone troed to purchase a "short sale?" Banks are taking months and months to answer. The mortgage companise prefor forclusures to make more money. Millions of homes are rotting in limbo status do to grade as banks still keep them on their books not to show loses. How will the housing market ever fix itself? Obama does not care.The demos were good to blame the Republicans for the mess the were also very responsible for, forcing banks to lend to those that could never pay a mortgage.

Many of the States are in messes this year that are going to add to the liklihood of a double dip recession. . . .
The Census is going to add to the employed in the first part of this year and could affect the unemployment rate. However, the reports in June when the Census workers are laid off may well trigger the end of recovery and the beginning of a real Depression. . .

Republicans gaining control of Congress will paralyze Government for two years when the problems grow. . . probably the best advice. Buy Gold. . . or Guns.

Very fascinating things about the Bible:
I recommend....www.bible-codes.org
Dean Coombs is a Prophet of God, in Toronto, Canada.
His on-line ministry is safe, free, Christian, anonymous.

Sept 11, 2001,
the WORLD TRADE CENTER collapsed,,exactly 7 years later, the WORLD TRADE collapsed, with Dow drop of 777.7 points
exactly 7 years later, on 9-11-08,,,,,,IN THE CENTERPOINT OF THE 7-DAY "FEAST OF TABERNACLES", which is a fore-shadow of the GREAT TRIBULATION

The all-time RECORD for one-day DOW-JONES stock market point drop was 777.7 points, 7 years after the WORLD TRADE CENTER COLLAPSE, on Sept 30, 2008,,,,as a result of the WORLD TRADE COLLAPSE.

7 is God's number for God, completion, perfection.
777 = God the Father
666 = the ANTI-CHRIST
888 = the SON OF GOD, Jesus Christ (gematria)

The Dow-Jones closed at 9605 on 9-11-01 tuesday, 9-10-01 monday, and 9-07-01 friday, and 9-11-09.
9605 = 9(605) = 9(6+0+5) = 9(11) = 9/11/01 = date of disaster.
So, God closed the Dow on 9-11 points, on date 9-11 (sept 11). Twice.
The Disaster, and exactly 8 years later.

the lowest close for S&P 500 INDEX for the last 10 years is 666 in March 2009.

there are many 7-year-periods in the Bible,
the 7 years from 9-11-01 to 9-11-08 is a fore-shadow of the soon-coming 7-year GREAT TRIBULATION PERIOD. (Daniel and Revelations)

At the end of the Great Tribulation, the world economy will collapse, and business-men will weep because they had profited from trade with Babylon. (Revelations 18;11).
Today's economic collapse is a foreshadow of that coming Collapse.

The 9-11 Disaster was a SIGN FROM GOD, warning the world, that the End of the Age is near; Believe God and repent, before it's too late.
The world failed to heed the warning, so, exactly 7 years later, God collapsed the WORLD TRADE.

God picked the date Sept 11 (9-11) because 911 is the famous EMERGENCY number. The "emergency" was: the whole world is ripe for Judgement, and was near Disaster and God's Judgement.

On 9-11-02, the first aniversary of the 9-11 Disaster, there were 3 SIGNS that proved that the 9-11-01 Disaster was a SIGN FROM GOD. See www.bible-codes.org for that.
The NY State Lottery randomly picked the numbers 9-1-1 as the winning number on 9-11-02. The huge USA Flag at the GROUND ZERO ceremony split in two pieces, horizontally. On TV, the CNN news anchors remarked how strange and wierd that was.
http://www.bible-codes.org/Trade_Center_Anniversary_signs.htm

Saddam Hussein died on Dec 29, 2006.
About 3 months before he died, Dean Coombs was reading a bible-code from the Old Testament. The code said that Saddam would die on 12-29-06, by hanging by the neck with a rope, like Haman in the book ESTHER (OT).
Dean told this on his web-site, I marked it on my calendar at home, I waited 3 months, and Saddam died on that day, by the predicted method of death! Wow!

God predicted Saddam's death-date and method-of-death, to the exact day, 2500 years before it happened, in the Bible (OT), in a hidden bible-code.
In Isaiah, God says that the proof that He is the only True God is.......the God of Israel is the only one who can predict the future. No other god, person, Scripture, religion, science even attempts to predict the future (they know that they can't do it). Isaiah 46;9-10.

The Bible (OT and NT) is about 28% predictions of the future. And much of that prophecy has already come true (fulfilled). The fulfillment of some prophecies, such as Christ's Second Coming, is in our future (not yet fulfilled).


God has sent many SIGNS FROM GOD, starting on Jan 1, 2000.
Dean Coombs told us: The SIGNS will start slow and easy,,,,,,then increase in frequence and pain, as time goes along, like a woman's child-birth pains. (1 Thess 5;1-11).
At the end of this series of SIGNS, the Signs will be so blatant, obvious, understandable,,,,,that every person on earth will understand that it is a SIGN FROM GOD and the End of the Age.


========
quote from http://www.bible-codes.org/world_trade_center_sign_economic-collapse.htm:
God Has Everything Under Control!


The collapse of the World Trade Center was a sign of the collapse of world trade seven years later as predicted by the Mene Tekel Bible Code.

As the quotations from an article by Wikipedia shows, two pivotal events that mark this collapse in September occurred on Sept. 7 and 14, with the middle of that week being Sept. 11, which was the seventh anniversary of the collapse of the Trade Centers in 2001 --- the very symbols of commerce. Sept. 14 was especially significant.



The following is quoted from Wikipedia. (While Wikipedia is not an authorities source, however, it does tend to hash out prevailing points of view.)


Sunday, September 7, 2008
The United States director of the Federal Housing Finance Agency (FHFA), James B. Lockhart III, on September 7, 2008 announced his decision to place two United States Government sponsored enterprises (GSEs), Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), into conservatorship run by FHFA. United States Treasury Secretary Henry Paulson, at the same press conference stated that placing the two GSEs into conservatorship was a decision he fully supported, and said that he advised "that conservatorship was the only form in which I would commit taxpayer money to the GSEs."



Sunday, September 14, 2008



The collapse of Lehman Brothers was a symbol of the global financial crisis.

On Sunday, September 14, it was announced that Lehman Brothers would file for bankruptcy after the Federal Reserve Bank declined to participate in creating a financial support facility for Lehman Brothers. The significance of the Lehman Brothers bankruptcy is disputed with some assigning it a pivotal role in the unfolding of subsequent events. The principals involved, Ben Bernanke and Henry Paulson, dispute this view, citing a volume of toxic assets at Lehman which made a rescue impossible. Immediately following the bankruptcy, J.P. Morgan provided the broker dealer unit of Lehman Brothers with $138 billion to "settle securities transactions with customers of Lehman and its clearance parties" according to a statement made in a New York City Bankruptcy court filing.

The same day, the sale of Merrill Lynch to Bank of America was announced. The beginning of the week was marked by extreme instability in global stock markets, with dramatic drops in market values on Monday, September 15, and Wednesday, September 17. On September 16, the large insurer American International Group (AIG), a significant participant in the credit default swaps markets suffered a liquidity crisis following the downgrade of its credit rating. The Federal Reserve, at AIG's request, and after AIG has shown that it could not find lenders willing to save it from insolvency, created a credit facility for up to US$85 billion in exchange for an 79.9% equity interest, and the right to suspend dividends to previously issued common and preferred stock.


This week of Sept. 7-14 just happens to correspond to the seventh month, the 15-22 on the 360-bible prophecy calendar as explained in dozens of articles and as repeatedly chronicled over the past 15 years on my web sites. (Please keep in mind that this calendar is slightly different than the regular Jewish calendar used today.) These dates, the 7th month, the 15-22 corresponds to what the bible calls the week of the "Feast of Tabernacles".

Students of bible prophecy point out that the seven days of Tabernacles are a type and foreshadow of the "seven years of the Great Tribulation period" to come, during which period world economies will collapse and then be restructured, (Rev. 13). We see the same thing happening now. (This is not to say that we are now entering the Great Tribulation period, but that this is likely another lead up to it, and as such, God is using the same time frames of that final climatic period still to come! God is reminding us that He is sovereign over all. I am referring to the biblical time frame of a seven-year period divided in half, or as days, 1260 plus 1290/1335 days, etc., Dan. 12, Rev. 12-13.) Thus, from the fall of the World Trade Center to the fall of world trade are a week of years unto the exact week of Tabernacles! This is highly significant in its obvious symbolism.

The Feast of Tabernacles was a festival that commemorated the wanderings in the wilderness for 40 years by the children of Israel when they came out of Egypt. (Please see Rev. 12:1-6, perhaps with a commentary, for the thematic connection between these seven years and the 40 years in the wilderness.) The seven days of Tabernacles has its ultimate fulfillment when God removes His people out of this world at some point in the coming seven-years of tribulation, and then we will "tabernacle" with God face to face forever.

(Rev. 21:3-4) "And I heard a great voice out of heaven saying, Behold, the tabernacle of God is with men, and he will dwell with them, and they shall be his people, and God himself shall be with them, and be their God. And God shall wipe away all tears from their eyes; and there shall be no more death, neither sorrow, nor crying, neither shall there be any more pain: for the former things are passed away."

un-quote
===========

A few years ago, DEAN COOMBS told us: a world-wide economic collapse and famine will come soon.
I'm stock-piling food, water, toiletries, necessaries, etc.

God reveals His Secrets and Spiritual messages to His disciples, but He closes the Spiritual understanding of the un-believing crowds.
Let's be His Disciples. (Matthew 13;1-17)

Lord Jesus Christ, we praise You. Please reveal to us Your Secrets.
amen.

These Signs and Disasters are not primarily punitive; They are primarily Redemptive. God would much rather forgive and save us, than to punish us. God is trying to save as many as possible.
But, many reject Christ, because people love the pleasures of sin, rather than the Love and Righteousness of God.

God uses many ways to save people. Bible-codes are just one of many ways that God uses to catch people's interest in God/Bible/Salvation.
For example, some people are attracted to City Churches. Others are attracted to rural Churches.
Some people find the Lord thru good times. Others thru hard times.
Some get saved when they're arrested, some get saved thru sports, charity, etc.

And, in the Great Trib, these patterns of Signs will repeat, and a future End-Time people will understand the events of the Trib by studying the Signs of today. Many Israelis in God's Elect Nation Israel will convert to Christ in the Trib.

How do we get faith?
Read the Bible. Learn from an experienced Bible-teacher. Faith comes from hearing (and reading) the Bible. The Bible contains it's own proof that the Bible is true. Ask God for faith. "We have not because we ask not".

God allows us free-will concerning our salvation. But, He sometimes over-rules our free-will, without our knowledge, to accomplish His Plan. He is Perfect Intense Love; so, we can trust Him to do right. He intensely desires our salvation. (Proverbs 21;1).

I recommend the AMPLIFIED BIBLE, PELOUBET'S BIBLE DICTIONARY, HALLEY'S BIBLE HANDBOOK, NIV STUDY BIBLE.
and
DAN CORNER www.evangelicaloutreach.org
Dave Hunt www.thebereancall.org
Dean Coombs' Christian discussion forum....www.christian-forum.net

www.e-sword.net free on-line downloadable KJV bible, searchable, with Strong's numbers, definitions, and references

DAVE HUNT'S free newsletter, by email or snail-mail, monthly

POINT OF VIEW, (by Kerby Anderson) Dallas TX, free email newsletter, daily

biblegateway.org...........on-line Amplified Bible
blueletterbible.com.........on-line Strong's numbers
michnews.com..........conservative news
bloomberg.com.............financial news
cmegroup.com.........corn, farm, commodity prices, news
shadowstats.com.......true inflation rates
drudgereport.com.......conservative news
lewrockwell.com.........libertarian articles
spaceweather.com.......Signs in the Heavens

Blame the Bilderberg group for all the financial problems that the U.S an the free world is having. These people are dead set on turning this into a one world goverment and the only way to do this is to create enough hardship on the people that they will accept anything for a little releif.
Who do you think controls the FED and all the Central banks.

Only FREEDOM fosters Prosperity and PEACE, and I mean froodom FROM govt as the arangement America was founded UPON.

The Austrian School of Economics, and von Mises, are the ONLY economists to correctly call not only the Great Depression Mises know militarism & govt largesse financed with fiat would ultimately bring. It is the Austrian Business Cysle Theory that in short says rising prices are strictly a function of monetary expansion - IE more dollars, making ALL dollars worth, less chasing a fixed amount of goods, only makes goods SEEM more expensive when it actually is a depreciated dollars. That bolstered by the fact that gold tracks most all other commodities very well correlated.

Govt produces nothing.

It gives NOTHING to NO ONE not first stolen from others for votes or campaign contributions.

Govt ONLY consumes, & ours is the biggest waster of scarce natural resources in the history of mankind.

Govt's interventions into what should have all been free markets WW by now, is ALWAYS for the benefit of the power elite few of the ruling class - and NEVER for the masses of peoples. Because they can!

Modern mankind don't need these stinkin govts continually warring and fleecing us as they are, we need govt ONLY to protect or rights and property, as was our founding precept of a golden rule - do no harm central govt, with states as vote-with-your-feet freedom's test tubes vying competitively for residents to go to whichever state treats it's citizens BEST - like the market in computers which govt hasn't yet wrecked ergo better performance at ever lower prices.

Study up folks, we've been miseducated for 100 years now - time to get back to FREEDOM'S program and VOTE ALL THE SOBS OUT!

20th Century Democide
http://hawaii.edu/powerkills/20TH.HTM

The Merchants of Death
http://yamaguchy.netfirms.com/7897401/merchants/merchant_list.html


The US Constitution
http://mises.org/media/976

The Rise of the Nation-State
http://mises.org/media/972

David Hume on Colonial Secession
http://mises.org/media/2936

Constitution: Four Disputed Clauses
http://mises.org/media/1836


The Hard Money Issue in American Political History
http://mises.org/media/2844

http://mises.org/media.aspx?action=search&q=what has government done to our money


The History of the House of Rothschild
http://www.erichufschmid.net/TFC/Rothschild-timeline-revised-excerpt.html


Gold and Economic Freedom
http://www.usagold.com/gildedopinion/greenspan.html


Democracy: the God that Failed
http://mises.org/media/1099


The Fed and the Power Eilte
http://mises.org/media/2787?silverlight=0

Introduction to the Financial Elite
http://thehiddenevil.com/introduction.asp


Why did America get into World War I?
http://www.mises.org/mp3/rothspeak/ww1Morgan.mp3

Peace in the Middle East: Empire, Oil, and the Reshaping of the Middle East After World War I
http://mises.org/multimedia/mp3/ASC2009/ASC09_Tooley.mp3

A Century of War
http://mises.org/MultiMedia/mp3/20thCentury/10_20th_Denson.mp3

War and Inflation: The Monetary Process and Implications
http://mises.org/multimedia/mp3/misescircle-ny06/Salerno.mp3

The Song that Is Irresistible: How the State Leads People to Their Own Destruction
http://mises.org/multimedia/mp3/25thNYC/03-Higgs.mp3

Six Months that Changed the World
http://mises.org/multimedia/mp3/bb05/Denson-07-20-2005.mp3

It is Obama and the Dem's intention to destroy our economy so they can save the earth from
"warming".

With all due respect to the various partisan commentators: what has really changed in the US? Obama has merely continued the policies of his predecessor.

The first Bailout was courtesy of the Bush II administration and the Congress. The bailouts are open-ended, coutesy of the Bush II administration and the Congress.

Obama has continued slaughtering people in Iraq and Afghanistan and has continued the bellicose rhetoric to any group that does not follow American instructions. The partisan handouts continue, though the recipients may have changed.

Frankly, the United States hasn't even begun to feel the impact of the Obama Administration's initiatives: it has only been a year folks.

What the United States is experiencing now is a product of gross inflation of the Money Supply so Bush II could have his wars and Americans could live beyond their means. The inflation of the Money Supply under Obama will not be felt until 2011 or '12.

Americans do not benefit from quoting the partisan line: Democrats and Republicans have sold America out.

Call to ACTION. Why wait for the elections to do something about this nightmare?
Calling on all US Citizens:

FULL TEXT OF PETITION:
http://www.thepostemail.com/2009/12/26/petition/

Petition to the Hawaii Government to release Obama’s Vital Records

Obama and the fat man from Venezuela 2 peas in a pod! Welcome comrade!!

Where are the reporters of truth?

Where are those that ask our leaders (or owners) the tough questions AND PERSIST until they get an answer; not just a reply but an answer.

Feeble, cowardly, spineless fops that spew nonsense.

Ambrose is one of a few who shine a light on a small part of the real situaltion.

Look at this chart:
http://consumerist.com/2008/01/monthly-mortgage-rate-resets-2007-2016.html

In 2008-2009 the subprime defaults rocket and cause the crisis. If you look at the chart there are very few of the other types of mortgages in reset and default at that time.

Come Feb/March 2010 onwards there are loads of Option ARM (Adjustable Rate Mortgages), more 'Subprime' and also the 'Alt-A mortgage' resets.

In short, the US spent all its money on bailouts for the last load of losses. What are they going to do in the next few months to stop what adds up to even more defaults and losses than the subprime?

Part 1 (6 mins): http://www.youtube.com/watch?v=I4rvKkDkj3w
Part 2 (6 Mins): http://www.youtube.com/watch?v=HZzHXsNgkkk

Now look at this (Published: 05 Jan 2009):

http://www.telegraph.co.uk/finance/economics/4125947/Willem-Buiter-warns-of-massive-dollar-collapse.html

This is where it hits the fan.

Dear Ambrose – We need not repeat the “flexibility” of the extrajudicial activity against home and farm foreclosures today, because we don’t have the same threat from the “… Red Unions and Coughlin Fascists.” The Marxo-Fascists are already in control of the U.S. government.

To James L Beard. Answer to your question "where are the real men in America": They are drunk in the bleachers in the football stadiums across the country, they are grossly overweight and can't get out of their recliners, or they are in the downtown spa waiting for their botox injections to soften up a bit before they head to the corn bar to pick up their sluts. Sorry, but I have wondered, how can anybody, men or women, read this stuff day after day and then be willing to just sit back in the "bubble" and wait until the next election to fix this mess? Answer, the "real" in "American men" no longer exists.

I don't care anymore. Neither my indifference or my passion makes a difference.

My wife died a year ago, i lost my home and my business and I moved out of the country.

Who ****ing cares.

Thank you UK Telegraph for printing the truth. the majority of the MSM in the US are so far up Obamas bum that they cannot see the light. they are not reporting the truth and Americans as well as the world will suffer for their dereliction of duty.

the MSM wants to beat the Tea Party movements up but the Tea Partiers may be one of our last hopes to regain our country and be something short of an all out revolution.

IT would kill Obama to say"tax cut", its just in in their vocabulary. I think the problem is that not ALL Americans pay Federal taxes. They would be even more outraged if they had a pony in the race. Obama is using the nation's credit card to fuel jobs(very few) to his union pals. We're headed for a double dip and the BRIC contires will lead the new economy of the globe.

"The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary of News International. News International is entirely owned by the News Corporation group, headed by Rupert Murdoch. "
Wikipedia.
Say no more!!

For those who are hinging their hopes on the upcoming elections, you may want to read this:

http://www.americanthinker.com/2010/01/understanding_the_democrats_sc.html

"All of you communists out there just cannot wait to sell capitalism down the river to the masses. That is because marxism does not work, nor socialism. Wall street may not be perfect, but it has allowed middle america, immigrants, independents, and risk takers to gain enourmous wealth compared to any other system, and that is the big problem to communists. creating Independence, and not Dependentence on Big Gov. the crisis was created by Big Gov, GWB, and Demon rats."

Drivel. Largely illusory wealth, based only on debt.

Most Americans earn less in real terms than 30 years ago.

Wall street imploded totally - did you miss that? It was only 'socialism' that saved it, along with the entire world's economy.

Now the selfsame folk who engineered the crisis are taking the (our) free cash and pumping up the stockmarket before the next dump. The perfect crime. The banks must be laughing all the way to...themselves.

At least you acknowledge Dubya as part of the problem, and don't blame it all on the Democrats like some deluded fools do.

It is sad to see so many Republicans trying to blame Democrats for the current economic morass, and it will be sad to see the Democrats taking credit for the mini-economic boom that is coming. Both parties have permanently devalued our country by growing government in every response to the natural market cycles that the Federal Reserve unnaturally exacerbates.

Kathleen: a brillant, factual post.

History repeating itself? Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression? These are not "mistakes" but intentional actions to destroy the US economy in the effort to spread socialism. History has shown time and time again that to spread socialism you must destroy the capitalist system. Make no mistake about it, this is the intent, and I am not alone in this view point.

I would like to personally thank all of you Americans for electing such wonderful, feminized people to be our representatives. Thanks again...

Blame the Baby Boomers - the most selfish and careless generation that ever lived. Democrat and Republican. Their entitlement and burden shifting got us here. Google: Winter is Coming.

Blame whoever you want but the facts are this began back in 1977 when Carter passed a law demanding banks lend to sectors knowing they could not pay back the loan.

From there it grew larger. We had groups like ACORN physically invading banks, and the homes of lenders, forcing them through intimidation to loan even more to sectors they knew could not pay it back.

Now here we are. People want to blame Bush. You can blame him (and the republicans) for much but this current economic crisis is not one of them.

Here is the proof.Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis.

At a 2004 hearing see Democrat after Democrat covering up and attacking the regulations and regulator to protect Fannie Mae and Freddie Mac (their Cash Cows) that are now destroying our economy because the Democrats let them cheat.

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Then to top it off we were led to believe that the first TARP bailout was going to cover the bad derivatives (paper being used as money - usually in the form of a title - such as property title).

Well, Bernake said he could not find those bad derivatives, and so now we still have all of these bad pieces of paper out there, but no body knows who has them, where they are, how much they are.

Therefore, we do not know who we can trust and who we can not trust.

The problem has not been resolved. It has been temporarily "hidden."

When the next economic downfall hits it will be even worse.

This ladies and gentlemen is only one direct result of redistribution of wealth.

The U.S. people have been electing entertainers, actors, and comedians as Senators and a parade of silver spoon fed clowns for their President. A tragic comedy of errors which will leave few people laughing when all this all plays out in the theater of hard economic reality where printing presses do not create real money and unbridled extended credit is eventually reigned in when hard assets become the only real things of value.

So peopple are losing their jobs, and in turn losing their houses, and Obama plans to remedy this situation by pumping money into the same institutions that generated this problem? So billions in tax dollars are going to give Mr and Mrs America a few more months before being put on the street, essentially for no reason other than maintaining multi-million dollar levels of "God's work" income for Goldman-Sachs et al.? Sounds like an economy (and a demographic) reminiscent of 1930's Germany... wonder what might happen.

Again Mr. Evans-Pritchard is totally correct regarding the US Economy being in an actual Depression. All the economic reports are political of course and the three main thrusts: (1) the stock market rally shows a bonafide economic recovery, (2) U.S. housing market is finally rebounding (ignore a 2M shadow inventory of unsold homes) and (3) unemployment is on the mend (ignore the pen-and-ink change dropping 1.7M job seekers from the rolls) are all explicitly designed to kick the can down the road so politicians have a chance of being re-elected in November 2010.

frozen bear

America could pull itself out of this horrid situation, but you won't. You have become complacent, fat, lazy, and distracted by toys and TV. Your educational system has been teaching nothing for over thirty years, so most of you cannot find your own state on a map and it appears you cannot do arithmetic at all.

Too bad, you were the world's last hope.

You see what an Affirmative Action president gets you?

Capitalism separates the lazy and stupid from the smart and productive. Socialism mixes is all up so that you can't tell the good from the bad so you all rot together.

As an American I am most concerned about the declining fortunes of our nation. With regards to the current situation, the author identifies symptoms but not causes...Keynsian economics just doesn't work..never did. What is needed is a good dose of Austrian Economics..like President Harding who had the guts to do in 1920 when things were just as bad...cut govt, cut spending, let the market decide interest rates (end the Fed), let prices fall and liquidate the bad debt...only if we let market forces clean up this monetary/govt mess will capital and labor then be redeployed to producitive endeavors (not more home buiding, construction, or "green jobs).

The Fed and Washington caused this mess with their easy money and "everyone who as a pulse should be able to buy a McMansion" policies...attempting to keep prices high and reinflate the bubble is the last thing we need to do..

But, wasn't it Rahm himself that state in June or July that the recession was over? You mean to tell me that he or the administration didn't know what the hay they were talking about!

Nice headline. Foster class warfare much?

This guy is absolutely correct. Until housing stabilizes the real value of the market wont be seen. It is too high and dangerous. Only after deleveraging takes place will things turn around. The matter is so serious that a second leg down is not only possible but probable. Only a madman would raise interest rates now for if it is done housing prices will crash further and thus reduce banks evaluations. Very serious situation.

To all who talk about the "American Revolution", and implore Americans to "Wake Up":
Exactly what or who are we supposed to revolt against?
Believe me, we are awake. The question is, what do we do? We can't start committing acts of violence, and peaceful, righteous anger has gotten us nowhere. Our elected leaders are well aware of our pain and anger, and it's obvious that they don't care. So, I ask: What is it exactly, that we are supposed to do? There will be no 'revolution', it's just not in us. We have been beaten to a bloody pulp; we have no fight left in us. We just wait until our oppressors throw us dirty little bones of hope, which we then all fight over. They know exactly what they are doing, they have been doing it for decades.

Energy-Economics and of course the Environment! Its what I call the 3'E's- Now lets not forget those "global-central-planners,along with those mighty global-dynastic-banking-families"---- Anyone that has done the deep research knew long ago,exactly where America was headed! By design! All it took was to change the culture-(of America) and it only took 2 generations to accomplish it.For the non believers....I say to you-peek a booo!

Lets close down this fraud of an administration and keep Gitmo open.

It is pathetic that American have to read UK newspapers to get the truth. You wouldn't read, see or hear any of this news in any of the Mainstream midget media except Fox. America needs the truth. But we're sure not getting it from our media.

The scenario being played out here, and orchestrated by the Obama administration and the democrats in congress is to completely cripple the financial system in America..Devalue the dollar, and cause an un-holy dependence on the federal government... We should all wake up and understand our life will never be the same if we don't stop this out of control federal government... Read: Tea Party Passion...at....
http://cooperscopy.blogspot.com/

UK want some 'hope and change'?

I keep seeing the word "democracy" used as a reference to the U.S. form of government. The U.S. was designed and formed as a Constitutional Republic. The Rule of Law?? Mean anything to you???
Democracy is a terminal disease and the fact that supposedly educated people, here and elsewhere, don't know that is a direct indication of the factors behind our present economic circumstance.

Big money depends on the propaganda of the perfect "democracy" that will ensure the population at large " all good things", at no cost. Big money has for decades used this propaganda, while consolidating the control of food production, money supply and healthcare industries. The strategy is as always - promise some of the population safety and the lack of deprivation, in order to control the rest of the population absolutely.
The U.S. government was predicated, by our Founders, on the basis of money being a local, gold / silver / property based commodity. That design eliminated the International Banking Cartels control of every aspect of the individual Citizens life. Institutionalized Treason, within the U.S. government, has for a century worked the tacticis and strategy that has yielded the pending complete dissolution of Freedom and Liberty in the U.S.; and then the World.
George Washington and his Colonialist Army cured a very similar issue, promulgated by the King of England. Most people today seem to have some PollyAnna idea that the International Bankers and the Quislings inside the U.S. government/bank corporate structure can be induced, by some smooth bit of rhetoric and civil discourse, to alter their intentions. In the 1770's George Washington knew better that that - what makes any of you think that our circumstance is any different today?
Tyrants and Tyranny require direct confrontation and "skin in the game" to be impressed of their mortality.
Ask George Washington.

Between the FED and Obama, deflation will not be allowed ... it is simple enough to avoid, just by printing dollars. Inflation is the way of the future ... but experts say that won't happen because we currently have so much excess capacity. Fundamentally they are correct, but what they are missing is that the workers required to utilize that excess capacity will not work for wages that are sustainable at the current value of the dollar. BUT, most people don't pay attention to inflation, so once inflation has devalued the dollar sufficiently to allow the sustainable wage rate to equal the perceived 'living wage' that excess capacity will become productive. Make no mistake, we are headed for inflation and the only thing that will temper it is a return to reality for the perceptions and unrealistic expectations of the average American.

All of you communists out there just cannot wait to sell capitalism down the river to the masses. That is because marxism does not work, nor socialism. Wall street may not be perfect, but it has allowed middle america, immigrants, independents, and risk takers to gain enourmous wealth compared to any other system, and that is the big problem to communists. creating Independence, and not Dependentence on Big Gov. the crisis was created by Big Gov, GWB, and Demon rats.

10.0!!! Unemployment is officially holding at 10 percent, a ridiculous and absurdly high number that should hardly be surprising given the additional burdens that the government and particularly this administration has foisted on the private sector. First off, the magnitude of the problem was recognized early on with dire predictions thrown out should the so called stimulus bill not get passed. I cannot even pretend to call what came out of Congress and was signed into law anything approaching a “stimulus” bill. It was simply a tally of what projects each Democratic congressman wanted done in their district, and once these were bundled into a large enough mass it had the balance sheet look of a stimulus package but no other tangible and beneficial aspects. The fact that the Obama administration tried to sell it as such demonstrates a lack of seriousness on their part when dealing with the economic crisis. That lack of seriousness is what we are all paying for now. The spoils of the 2008 election rained out of the treasury like the culmination of a barbarian attack. The fact that our economy has not magically recovered simply on the command of Obama himself has led to the comical defenses of the “stimulus” spending and a falsification of jobs created or saved while this listing Titanic of an economy sinks lower in the water.

The burdens on the private sector are more onerous than ever, and this is how the recovery is to take hold? Snuffed out in the bud is more like it. Twelve to eighteen months ago I argued the policies that I thought were necessary to forestall the pain we are enduring now. I linked the economic recovery to policies that encourage the marketplace to do what it does best and work out any imbalances without a huge bump in unemployment rocking the system. Later, as the situation became more dire, I argued for across the board tax cuts to encourage private employment and an expanding economy. My thoughts of the right size of tax cuts were boldly in the 25% range. Now the economy appears in even worse shape, perhaps mortally wounded and revenues on all levels of government have fallen precipitously. The problem is not too much spending or too little spending, but a moribund economy with no reason or mechanism to start growing again. Believe me when I say that this can occur.

A truly healthy and growing (private sector) economy would cure so many ills. With that as a goal I do not think that any idea should be off the table. In that vein I propose the only policy that I believe will quickly restore the economic engine of the world that this country has been for going on a century. I propose a corporate and income tax holiday for a year followed by a gradual reimplementation of the taxes back to where they need to be to sustain this nation, its goals, and its citizen safety net. Imagine the boon and subsequent boom that would occur should the consumers and the companies that serve them receive a year off from the taxes. The results would be stunning. The surging economy that this would provide can then be properly harnessed for clearing up the budgetary imbalances, even better should some restraint in the rate of government growth manifest itself.

The price tag for such a scheme would be about a trillion dollars a year prorated down annually as the taxes are gradually restored. I say a trillion since I believe that such a steep revenue drop will actually have the federal government pull in less money from taxes than they have in many years. On the scale of a 14 trillion dollar debt another 1 to 2 trillion would not be too much to add for the expected benefits. Like a venture capital driven startup, this deficit would set the foundation for explosive growth and a broad base for restoring the revenue to the government. A small price to pay that could be repaid in a handful of years with a more sensibly run and no longer overpromising federal bureaucracy and a strongly growing economy. The lesson of the surplus years following the Republican revolution shows what can be done without hardly even trying thanks to a robust economy. However, anything less at this point would likely amount to good money chasing after bad, particularly as proposed by such a market-phobic group as those in power now.

There is a good reason for so many foreclosures in th USA and it isn't job lost - the foreclosures came before job lost - The reason for foreclosure is the mere fact that people were allowed to buy homes that they could not afford, did not have the means to make the payments for the house, were allowed to take a second mortgage out on the same day and used that money to either make mortgage payments or pocket the money to live the good life and maybe make one or two mortgage payments and then wait for the house to go into default and then about two years later for the sheriff to remove, meanwhile they are living for free except -paying only what they had to pay to get by. Mortgages were given out to people who gave false Social Security numbers, had no jobs, lied about their jobs and didn't even live in this country and used the system to make money - now do you get the picture - these are the people that put us where we are to day. Now if you want to shed a tear - shed the tear for the guy who did everything right - saw their homes devalued, their savings go belly up and if they were unfortunate enough to lose their jobs - stands a good chance of losing everything - all because the liberal government allowed it and it did start under Bill Clinton.

The fact that we do not see articles in US media like this, speaks volumes about America's current condition. The word "depression" is strictly banned from all communication. Not 5 Americans know that over 600,000 left the job market last month. And the President's chief economic advisor regularly tells us "the recession is over".

In short, America is in a state of denial unprecedented in its history. In the absence of any new economic engine, it is doubtful the US economy will revive during the remaining life span of many reading this now. Mr Evans-Pritchard is on target.

A S Prisant/Prism/San Francisco
www.wordsmithwars.blogspot.com

NEVER HAVE SO FEW TAKEN SO MUCH FROM SO MANY. Lincoln-"You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time". Lincoln-"We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution." We are going in the direction of Russia in the cold war with leaders who follow Marxist agendas.

We have nothing to worry about with the SEC watching our markets. Besides, Bernard Madoff was the guy who made the first black box for matching computer generated trades at NASDAQ, when he was their Pres. Not bad considering he never really sent in any trades... I wonder why nobody looks at His; black box and tell us how it works? I have never been able to find out how it matches trades and sets price. If someone knows I would love to find out just how the thing works. Thank you in advance.

"Europe is even worse."

Based on WHAT? If UK is toast, it does not mean the rest of Europe is toast.

Obama is just setting up the US for another Night of the Long Knives...The unholy alliance of the media, ACORN, SEIU, and the DNC.
Obomoba is the antichrist.

You wanted change you got change. The thing is it's going to get worse. Card check is coming and the unions will have everything they've wanted. Complete control of workers.
Next the true tyranny after healthcare (tax and fraud bill). You're just starting to see the contempt and arrogance they hold for us. Wait till the real control comes. You won't be able to go to the bathroom without permission or take a shower or turn your heat on.
They (Obama and communists et al) will give you a salary, a job (government) and everyone will be cum be ya and equal. I will make three hundred a month and you will make three hundred a month and the government will give us housing an old bike to peddle and food stamps but there won't be much food cause the government will not allow you to eat anything but the stuff they approve.
If you get sick tough! Wait in line like everyone else. Need surgery? Tough! Wait in line like everyone else.
Progressives (communists) will control and own everything.
Hope you like your change.
Don't believe me? Tough! It will be too late by the time you wake up.
Fools, Idiots. Here comes your change.
Goodbye America. It was fun while it lasted.
But you were too stupid to wake up to what was happening right under your noses.
America we deserve what we get because we didn't have the backbone to stand up and fight.

re: "Corporations should be ILLEGAL in the US!"

Yeah that works so well in North Korea! Sure lets outlaw companies inventing stuff like MRI machines and wireless technology.

Why didn't the author mention Paris Hilton and Simon Cowell? Or the Kardasians? You people gotta get your priorities straight. Who cares about all this economy stuff. Daddy Barrack will take care of us.

mmmm ... mmmm .... mmmm .... barack ..... Hussein .... Obama .... mmmm .... mmmmm ... mmmmm.

Very scary article. Every time I see another new gov't face, I see another bobble head moron blindly following the messianic cadence that Obama esposes as he proposes policy after policy that is directly opposite of what needs to be done. The dems are like kids in a candy store spending borrowed money wildly, printing dollars,increasing entitilments,supporting unions,increasing gov't jobs,higher taxes,and trying to silence the opposition.

As if Republicans could fix our problems, please. We are all screwed no matter who's in office.

Everything is terrible...I'm just curious though. What is going to happen when millions of unemployed workers exhaust their benefits and none are forthcoming? Millions of people with no money,nada,zero...This is a horrible Depression don't let the verbiage trick you...in the 30's, 125,000,000 people lived in the U.S. Now, over 300,000,000...

The big change is a flatline. Zero pulse. Obama is doing his job perfectly, as did Bush before him. Even smiling Bill, NAFTA was the set-up, and Marshal Law was the final solution. Once they come for the average guy's guns, the game is over- World Government. One size fits all...

'Our' reaction? World War, what else, given decades of public school indoctrination.

For now, there are not more book sales, no more computers, no new cars....

The truth is that we Americans have use credit to ignore basic economic common sense and live way beyond our means for decades. The rest of the world should take heed, since you are not far behind us in our destructive bad habits.

At the beginning, it was like running downhill - it's inherently unstable, but you can delay taking a tumble by running even faster. The problem is that you WILL reach the point at which you can not run any faster, and take your tumble (made all the more vicious by the extra speed you poured on trying to delay the tumble).

We need to relearn the wisdom and discipline of our grandparents. To save some of our earnings; to have something set aside for when (not if) a downturn comes along; to delay gratification and only purchase that for which we have cash; and to realize that there are things we don't really need at all.

The Catch-22 is that our economy has evolved to the point that a large percentage of it has become dependent upon us irresponsibly using credit to live beyond our means. If we consumers start behaving responsibly, restaurants, entertainment, electronics, service industries, and other things that are largely luxuries will be decimated, which will savage our economy even further. We know what the cure is - the question is whether we can survive it.

People wake up! Don't you realize that the stock market is being propped up by sinister forces? Everyone is being sucked in again, so when the market crashes again, the middle class will be be totally destroyed. Look back in history and you will see the Alinksy rule..create crisis, and deflate the monetary system, and the people will be begging for your control. The plan is in place, and the puppets will continue to use rhetoric for their agenda. They control the media, the banks, the insurance companies; the auto industry, and the unions...who is next..YOU people and you better know who you are and what you believe. They are going to create a crisis of monumental proportions and then we will know their plan but I hope it is not too late. 2010 is our only chance for paradime change, and we need to vote for true patriots...I believe we need a person like General Petraeus for President..

Wake up people. All the real value of the U.S. is still here.
We might see a run on banks if we let them fall in free fall but then we get rid of the "False inflated value" and we will see the real value show. This is the quickest way to purge the country of the poisonous assets the government and politicians are trying to "Prop up".
Once the purging is complete and the value hits the bottom the people who made runs on the banks will start to spend and our economy will recover.
Of course you won't have any more "Idiot" shoe shine boys driving around in Hummers but the people that understand money will spend on the value as this country has had for more then 200 years.
The government is the real cause of the problems. Look at Fannie Mae and Freddy Mac. The government just gave them a blank check to throw more of our money away. Wake up the "WRONG PEOPLE" are controlling the money! It was the "Government" that got us in and they are holding us in this position.
SWITCH to "Reaganomics" and things will improve. NO MORE "government run" anything. IT DOESN'T WORK!!

Our US government is like the twenty year old with their first credit card. They have no concept of cost/benefit and other tenets of fiscal responsibility that involve generating revenue sufficient to pay principal and interest to maintain good credit. Instead they focus on the availability of credit and spend up the balance on things that "feel good" or supply immediate needs/desires without considering the real cost involved. The only solution is for the individual 50 states to appropriate the "income" from taxes directly from the taxpayer and mete it out to the irresponsible federal government in amounts needed for their original mandate "in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity". The runaway spending of Washington DC must be reigned in and the only way to do so is to shut off the tap.

SUSAN NEWPORT RI
on January 11, 2010
at 01:50 PM

THIS IS WHAT HAPPENS WHEN YOU ELECT A MAN LIKE OBAMA, LACKING IN INTELLECT AND ABILITY

Perhaps you would prefer to go back to George W. If Obama is lacking in intellect and ability then his predecessor was positively Neanderthal. Did he not preside over the creation of the bubble ?

The new generation of Americans will go down in history as "the dumbest generation". They thought they were voting for American Idol when they voted for the teleprompter windbag obama. They are in for the most expensive lesson of their lives.

Great article that fully comprehends the issues that we currently face and those on the not so distant horizon. The housing market is reminiscent of Christmas in Bandah Aceh several years ago after the first wave had receded and prior to the real killer about to roll in. Somewhat amazing that such objectivity comes from a U.K. publication while our national media organs serve up a steady stream of pablum. (aside from WSJ and B'Berg)
Prosperity is not just around the corner. Banks are being allowed to shore up capital at an astonishing rate through FED policies of relatively cost free borrowing while carrying assets at highly inflated levels. Meanwhile GSE housing finance agencies are in disastrous condition. TARP and Stimulus packages are effectively political "slush funds" to be doled out to favored constituencies. Readers of financial news should take note of how often the phrase "kicking the can down the road" is being used. The administration is papering over problems without taking any meaningful action. Then again, we probably don't want this bunch to take meaningful action prior to the congressional elections and a return of some semblance of sanity to Washington.

Too bad the American media doesn't have the same clarity as to what the realities are as this article has. I guess they are all too busy trying to protect Obama from himself.

Barry the Clown couldn't spell economics if you ... well he just can't spell the word.

It is time we call for a NO CONFIDENCE VOTE on our Government.
Why doesn't the gov. just give each family a gun with the amount of bullets for each family member?

If you aren't going to help us why not release us from your corrupt style of Government? Dying in this country at this time is a better solution than living in the streets, cold and hungry.
By keeping the same Representatives the American people have ALLOWED them to get to big for their britches. We have given them the power to tell us F*** You. Corporations should be ILLEGAL in the US!

We are not represented by a Democracy anymore. This is truly a Corporate world. Who else in the world creates as much mass destruction as the USA? So sad our country has DIED. Why would anyone want to give their life for this country today? It is an embarrassment to us as the whole world. We steal our children's education and for what? A war we have no business being a part of, but who cares we only let them grow up for the government to send off to get killed for corporate America. Such a tragedy! Such a loss of human life, all for old mens oil :(
Down with Abortion (we carry them)
UP with WAR (the government kills them) where is JUSTICE?

How can any idiot politician think they can take tax money (Stimulus) to give to the people and banks and these are the same ones that have to pay it back.
They are giving out $100 and the people they are giving it to will pay back $10 in taxes. Every $100 will see a $90 loss. This is lunacy. Reminds me of those pyramids schemes. Eventually there is no one left to bring in the $10 and the $100 that has been mounting will NEVER get paid.
I think the citizens of this country had better wake up because if we look at the history of Germany after the "29 crash" and before Hitler this is exactly what brought this country to economic ruin. Hitler took advantage of this to rise to power.
We need to vote the present "Politicians" out and start following sound economic policies or the same thing will happen here as the voting populace gave the power to the people that would follow this disastrous type of thinking!!
We are not talking Republican or Democrat. We are talking "Collapse" of the American economy.
WAKE UP AMERICA before it is too late! We need to be like Paul Revere and spread this word!!

Fell behind on my citibank credit card and have been getting hounded by them to pay my payment. I've taken a 5% paycut at work and my home value has dropped 30 % from its highest level. All the while I have 3 children in various stages of university. Should I pay my credit card? Yes - Should Citibank have been bailed out by me, one of the many taxpayers who saved their asses? NO! - Reprocicity does not appear to be in the language of Wall Streeters who owe a debt to the american nation yet use strong-arm tactics to demand payment from those who just saved their lives. This country is in the toilet!

G.- a very good post however you are wrong on one major point. You seem to think that Obama is different from Bush and is truly trying to do the right thing by cleaning up the mess the government and financial companies made under Bush. Your own political idealogy is blinding you to the fact that Obama is taking Bush's policies and increasing them by orders of magnitude. This train wreck is only getting worse under Obama. Not better.

I am not an economist. I am not a politician. I am a consummer, a regular citizen.

When I use to go shopping I could buy what I wanted when I needed it. But, no more though. I need to look for coupons, sales, buy one get one, anything. The size of the products on the shelves are getting smaller, lighter, and have fewer count in them. But the price stays the same. I eat a lot more rice which I now buy in a 25 pound bag. Turn off lights when I'm not in the room. And lower the heat as much as I can. Plus I use a wood stove now in the winter. I have to pay cash for most everthing since my credit card line has been lowered so much. I have to put gas in my car a couple of gallons at a time. I can't belive what has happened.

It is like a cold winter night mare. My current salary is down a third from my last postion. And my current salary is about one fifth of what it was 10 years ago. By the way, I also had to put out over 400 resumes to just 'find' my current position.

I am not in a position to discuss things that are beyond me. What I do know is that if you are very rich you really don't care and if you are very poor you really don't care. But, if you are like me, somewhere between those two groups, then my prayer is that GOD will help us!

-basil cardew- ...Americans may one day question the idea of a 'million man military overseas', but it will be to question Why the U.S. is still compelled to provide implicit & explicit defense for most of Europe, Canada, S. Korea, Japan, and a host of others currently skating by behind U.S. Guns. Then you will have China, Russia, and Iran providing your "security", through capitulation to their growing demands of course.

I think this might be just fine. The U.S. wasn't going to be the big military/diplomatic stick forever. And frankly many of us over here are fed up with being the free world's scapegoat while Europe jumps on the Demonize-America bandwagon...at the same time we finance your defense through OUR blood and treasure.

The world is changing, but it's an old story of taking sides before the next big war. God help us all, God willing.

To Gary:
A "Dumb Housewife" as President of the United States can do a better job of running this country than the moron Marxist that is currently running this nation. The elections of 2010 and 2012 can't get here fast enough. Hopefully, the nation will stay together long enough to see the next elections.

Nothing is too big to fail and if a homeowner's underwater, they can move out and rent.

THAT's how this problem will correct itself.

Get Guns, Gold, Food and Water and through those corrupt, Marxist/Socalist out of Washington DC.
Then we'll roll back all the political pork and "free ride" bills, finish the border fence, get our small businesses going again payoff all the trillions in debt and recaim our Country.

Americans (here at least...must be republicans) seemingly blame Prez Obama for their nations traumatic financial decline. However all the present players like Geithner and the man at the Fed are all men from the Bush era. Recall it was CLINTON that repealed GLASS-STEAGALL under the auspices of that great American ALAN GREENSPAN the man that demanded subprime mortgage subprime dirivatives. Thats why we are all up the Kyhber....and in stuck like glue to Afghanistan.

Should have elected Ron Paul. But no, we'd rather have a race between two know nothing morons...so much more exciting! I can hardly wait til 2012 when the tools of this country elect the lipstick pig.

And anyone believes the Fed will allow deflation? That $13 trillion is going to be hard enough to pay back as it is. Making each of those dollars worth more in goods and services won't help matters.

The reason for coming inflation is China. Raw material prices up, including oil, leads to inflation. Very simple Ben can not stop it.

Here's age old the story. Power hungry elitists who lie and corrupt the system gain electoral victories to complete their ongoing attempts to destroy the free market system and gain everlasting power. Obama's administration will continue its current policies, which are designed to create crisis thereby providing him and the Leftists congressional leaders the excuse to seize even more power. Their mistake, though, is that Americans are very intolerant of ongoing economic downturn and constitutional malfeasance. A second revolution is coming.

"The US economy grew at a 2.2pc rate in the third quarter (entirely due to Obama stimulus)."

ARE YOU KIDDING ME? CAN YOU PROVE IT? I think you mean "despite the Obama 'stimulus." More government spending will not get us out of a recession, not now, not ever. As always the answer is in freeing more people and more dollars to produce, and you do that by lowering taxes and cutting government spending.

As a Republican I am delighted with the Obama administration! My primary concern when Obama took office is that the Democrats would have learned from history and would check their ideology at the door. The put the lie to their rhetoric of governing in a pragmatic and reasoned manner the nanosecond they got the keys to the White House. It turns out that my worries were unfounded. Like a bunch of deliquents in juvenile hall who have just broken in to their headmaster's office these soi-dissant intellectuals, "czars" and leftie sychophants wasted no time in laying to waste everything they put their hands on while living out their fantasy "Animal Farm 2009-2010". Their pending, but certain, electoral obliteration will be a fitting end to what only can be described as total incompetence on a massive scale.

The real economy is not recovering. Any bump up in the economy is temporary. Why? Simple. Though trillions have been used to "bailout" companies, and purchase companies, etc. the root of the problem has not been touched - and that is bad loans that are being held but not searched for.

No one knows - in the government or private sector - which pieces of paper are good and which pieces of paper are bad. Therefore, we do not know who we can trust and who we can not.

This stimulus has been a shame from day one. The economy is being purposely wrecked in the U.S. in order to "transform" it. It's working.

In the meantime, we continue to have depression era unemployment, foreclosures, etc and the U.S. media continues to cover it up or try to give it a positive spin all to help Obama - screw the nation. Help Obama.

The post by G illustrates the type of thinking that has gotten us into this debacle. G's talking points come straight from the media and pundits in which he pretends to rail against. When Reagan won his first term he set in motion a recovery plan that worked without complaining about Carter and Carter's fiasco. In contrast, Obama and his supporters (including G) refuse to accept responsibility for being in charge right now. Obama is to blame for the U.S. economic crisis because he has intentionally choses not to implement Reagan's economic recovery plan.

Also, neocon is a racial slur against Jews. Second, Bush 41 and Bush 43 were not conservatives. They were Republicans.

Never thought I would see the day - The USA is no longer #1 -China is #1 - here is a hint for the politico thugs in Washington - the Chinese don't tolerate corruption in their government -

Small business employ and hire the most, yet they are being ignored. Obama & Co., are advocating higher taxes and changing regulation with Health care reform, Cap & Trade, The energy bill, etc... Most small businesses are in a "hunker-down" mode and are not considering hiring until things settle. If Obama & Co., would stop the 'Change' and establish more of an atmosphere of stability then many small businesses would get back to work and start hiring.

A better indicator of US unemployment (I wonder about the process used to calculate this) can be found at the web site www.BLS.GOV
Each month the US Department of Labor publishes detailed job,labor force & unemployment
data on a "local area metro" basis. This includes stats on about 350 metro areas across the 50 states of the USA.
Of course this has recently made for gloomy reading,but one does get a rather more thorough idea of the jobs situation across the United States. HLK- PA

China Just passed the USA as the largest car market.50 years of government regulation and Unions finally killed the goose that layed the golden egg.The Obama-crat solution? Subsidize a disfunctional industry buy selling treasuries that are approaching junk bond status and Crush future workers with unpayable debt.But hey, you can buy a "green" car for $60,000 and cure the uncurable imaginary global warming,ahem, I mean climate change.Oh yes,Frightem Industry by promising "Climate change Bill" and levy yet another tax on the citizenry at the molecular level on carbon.Yup, I would take my buisness to China as well. In the meantime the crown Jewel and the democrat city on the hill is Detroit. The irrefutable example and tangible result of left wing policy in america.To top it all off the first act by Obama's Ken Salazar was to cancell ALL Oil,Gas,exploitation and drive yet another nail in the coffin of the American Economy.CHANGE, here it is

Over the top taxation is killing the U.S. economy together with over the top federal spending. U.S. citizens are still facing higher unemployment and rising foreclosures provided Obama stays his course.

Obama is a miserable failure. He wasted nearly a trillion dollars on a stimulus full of pork and waste and he knew it from the start.

Everything is going according to plan. The Alinsky plan that is. You know, the plan that Obama uses to guide his destruction of the U.S. economy and the world as well. Obama has in just 11 months killed almost 3 million jobs while at the same time declaring he saved jobs. This is right out of the Alinsky Marxist Play Book. Lies about lobbyists, earmarks, transparency. All lies that rival the same used by Lenin, and Stalin. 2010 will be worse than 2009 and things will not get better unless Obama and his fascist thug minions are voted out of office. The big question is, can we survive the next Alinsky scheme of his. Legalization of the illegals. You know, his scheme to create a one party statist dependancy state.

Reading all these 'comments' is a true barometer of the anger and frustration of the American people. Rightly so, we have been financially raped by cheap politicians (both Democrat and Republicans) and the white collar scum on Wall Street.
Where are the real MEN in American? Where are our veterans who will 'defend' their country and protect their Constitution as they raised their right hand and swore to God to do? Where are our REAL LEADERS, General's and Colonel's that can take control of this mad house? Lock up all these crooks, drug peddlers, deport illegal people, and corrupt politicians!

We don't need another stimulus.

The Muslim idiot in the White House needs to force the banks to renogiate those loans to a manageable level.

Clearly, he is NOT interested in doing that. Not interested in helping the people.

Could those who elected this traitor be any more stupid? The answer is yes.

With the "One Worldians" running their sham worldwide now, the North American Union is poised to conjoin together like misfit pie to attempt to correct the imbalance of world economies and currencies. This is being done of course with the support of the EU which was the greatest sham the Bilderberg group ever assembled and did with the total buy in of all European Nations. Once the North American Union is ratified , the next will be the South Pacific Union that will include the Micronesians, New Zealandrs, Australians, Malaysians, and the other Island Nations who will, just like the EU and NAU, hold leadership roles on a rotational basis so that each country can capitalize on the revenues of their percentage of the One World Economy. By 2025 there will be the South American and African Union, the Pan-Arab Union, and lastly, The Pan-Asian Unoin in which the Chinese will never relinquish their power. And if this isn't enough to parch your mouth, understand that when this happens, the UN will control and rule all nations. And if Maobama has his way, there will be a bronze bust or statue outside of the UN showing him off to all of the pigeons capable of assembling throughout the history of man. Exactly what he would have deserved while the rest of us are recycled for future subsistance a la Soylent Green...

Looks like the Manchurian Candidate is doing his job! How stupid are the American people for thinking this socialist lawyer who never had a real job in his life would save our country. Democrats want to destroy the US.....and they are well on their way to doing it!

Are we surprised we're being governed by the three stooges, the katzimjammer kids? We elected a bafoon whose only claim to fame was he was a "community organizer" and rejected a sitting governor as vice president 'cause she had "no experience." Yeh, the left makes a lot of sense like their running of this country. God help us 'till November.

thats why I have my ar15 and plenty of ammo!

More blame it on Bushies here I see. Well it would do you good to remember that it was Clinton who started the flood of manufacturing jobs out of the US, not Bush. Bush was not much better but it's far from his fault.

Financial jargon apart, this article appears to say that the real American economy is not recovering as the nominal numbers suggest but sliding into a real depression that will trigger a second bubble burst in the virtual economy on Wall Street. Does this mean that bail-outs have failed to fix the problems and left more deeply indebted governments facing another crash? Does Europe go the same way?

Despite a low PCE, the US dollar monetary base jumped from 10 to 18 trillion in a brief span of months; an 80% increase. It would seem reasonable to anticipate at some point not far off, the inflationary pressure shoe will drop.

@ G.
on January 11, 2010
at 06:02 AM

Very good post, except you seem to think that Obama is different. He has been selected by the same elite that's selected previous presidents. Obama is singing off the same hymn sheet as Bush with only slight differences.

People think the Democrats and Republicans are so different and they have a choice, but both parties have been brought off. America is a one party state with two different factions.

The article mentions "Coughlin Fascists." That's fair enough, I suppose. But it's worth remembering that Coughlin spoke in the name of "social justice," not property rights and the free market. Fascism was, in some ways, a movement of the Left, at least as the terms are defined in the U.S. Europe, with it's aristocratic traditions, is different.

"Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism."

Actually, it is an exhibit of the massive transfer of wealth from taxpayers to shareholders, thanks to TARP and the stimulus bill(s?).

Inflation refers to the devaluation of currency, which has clearly happened here. Food staples have been climbing steadily in price but aren't counted when they become incovenient for politicians.

I do believe that eventually, the wealth transfer to the upper 2% will come back around to bite them. They cannot continually chip away at the foundations and expect to remain standing without supports. The fact that ever-larger numbers of people no longer have money to spend will effect their bottom line sooner or later.

The free market like the Efficient Market Hypothesis (EMH) is a good academic abstraction that does not exist in reality.

Americans and American economists support outsourcing and the free movement of jobs oversees because - well the academics argue that is the correct theoretical thing to do (and people remind us of the lessons of the Great Depression as to why we should continue to have free markets).

But China does not follow the academic model. Frequently dumping goods oversees plus artificially pegging the Yuan to the dollar it continues to raid American jobs (and India goes along for the ride too).

In other words the US (and Europe) play by the rules while China does not.

And jobs continue to flood oversees as a result.

Viva la Bush MORONS, reap it.
Like I said"the idiot never was the president" Dumb housewife will be next president if we live that long

Yea, I think the problem is lack of another stimulus. We should be printing more money, devaluing the dollar even more, and drop more dollars from the clear blue sky. Then we have to raise taxes to pay the debt. Yup, I'm sure that's the cure to all our problems.

It's amazing how we have such economic illiterates running our country. God help us.

eqcitizen is right, but nobody will listen.

I'm not certain that Wall Street is "reveling", but I am certain that President Obama and his band of thugs did ALL the wrong things to correct the recession. Obama believes that he can tax an already over-taxed citizenry and make the country get well. He is an idiot, of course.

The american people need to wake up to the fact the international bankters own and control us. Stripping the wealth of the people with the inflation of the money supply. The biggest tranfer of wealth in the history of america is taking place right now. Fiat currency worthless paper backed by nothing have taking the place of real money gold and silver. This have been going on since 1913. Just read LOUIS T MACFADDEN CONGRESSMAN FROM PA. On who is ripping us off. And why.

"A roaring US recovery is underway" according to today's Times
*********************************

LOL, based on WHAT? If you remove the government spending the economy had NO GDP growth in the 3rd quarter last year. Americas economy is 70% reliant on consumer spending and that has NOT increased except in areas in which the government has subsidized it such as the auto clunker program and the first time homeowners program.

Real unemployment is at 17.5% and with the total unknown of just how monstrous the tax increases to fund the health care bill will be, no one wants to spend any money. Business will NOT hire without knowing what the expense of an employee entails and that is why the hiring of temporary employees is skyrocketing. These are not permanent jobs and will go away, maybe to be replaced by real" jobs or perhaps eliminated by the employer ramping up productivity.

What many publications such as the Times are doing is attempting to cause the economy to turn by convincing consumers it is ok to spend money. As long as the unemployment rate is this high and climbing they are indulging in fantasy at best and criminal behavior at it's worst.

Free Trade and freedom in general has been under assault for 60 years now. The democrats have loaded the economy and society up with all the bureaucratic regulation, taxation and social spending that they can think of, to punish the imagined devils and buy votes from those who don't know any better. These things don't go away when faux conservatives get in to figurehead positions, though they get the blame when the expected results occur.

Democrats do not want a thriving economy for a free people. Totalitarian socialists the world over seek one thing. Domination and control. And by the time the bulk of the people understand what it being done to them, our economy and freedom will be in shambles.

Socialism always fails and it will this time too.

Change you can believe in!

You better keep the jingle in your pocket!

THIS IS WHAT HAPPENS WHEN YOU ELECT A MAN LIKE OBAMA, LACKING IN INTELLECT AND ABILITY.IT IS ONLY GOING TO GET WORSE UNTIL THE PEOPLE THROW OUT THE COUNTRY'S LARGEST HATE GROUP THE DEMOCRAT PARTY, IN THE MID-TERM ELECTIONS.

The best solution for the crisis is to let the free market rip. It will be painful and long but as someone once said, "progress through pain"

It is entirely possible Fed. could be manipulating the stock market at this juncture through proxy of course. Activity is all the traders ask for. They will buy or sell at any level with the intention of a quick profit and their aggregate capacity is considerable especially with the advent of electronic trading.
This will be fatal in the long run & could be the worst mistake of an illiterate economist.
Having said that stock market has not become a lagging indicator but has always been 6 to 8 months behind economic events as per conventional knowledge.

This quote illustrates why we are in this crisis:
"The middle class has been gutted by offshoring and outsourcing.It takes a government to change that but governments still seem to be in the thrall of the free trade orthodoxy that caused this."
People do not understand that we do not have free trade, nor do we have free markets.

Everything is regulated or taxed and then you ask why companies offshore their labor? Could it be because the restrictions and laws drive costs up and make labor more expensive? We cannot look to the government to solve the problem which they created with their easy money policies and broken Keynesian ideologies. Free markets are the only way to pull out of this recession without creating another one down the road. Read mises or rothbard.

The middle class has been gutted by offshoring and outsourcing.

It takes a government to change that but governments still seem to be in the thrall of the free trade orthodoxy that caused this.

This is very bad.

Today the FTSE100 is up another 33 points.
Today we are told by SHELTER that up to one million households have borrowed money on a credit card to pay their mortgage or rent over the past year.

"Housing charity Shelter said this figure represented 6% of UK homes.
Shelter said people in lower social groups had been most likely to need to use their credit cards, but that the middle classes had also been affected.
The charity said the figure was a "shocking discovery"."

http://news.bbc.co.uk/1/hi/business/8450518.stm

There is madness afoot.....

There is still consumer inflation - it's just in things that aren't counted in the CPI such as food and gasoline - thanks to cheap credit where Investment banks and so forth have bid up commodity and oil prices in the face of falling demand.

"A roaring US recovery is underway" according to today's Times.

Is the glass half full or half empty? The answer seems to depend on who you ask. There is a clear lack of concensus.

There are reasons to believe that the dollar will strengthen for fear of losing its global status and in recognition of the damage to a global economic recovery an excessively weak dollar is doing. The Euro will become more competitively priced to accommodate the needs of Ireland, Greece, Spain and eastern European EU members.

The dangers to the dollar, the euro and sterling are being flagged up clearly enough for policymakers and central banks to take action.

The dangers to the dollar and sterling are excessive weakness. The danger to the Euro and its struggling members is excessive strength.

It is not clear what measures the US is taking to cut its fiscal deficit. Cutting public spending, although essential will keep the US and UK firmly in recession, not matter how cheerful Mr Kaletsky is feeling today.

No inflation? Have you seen the inflation rate on commodities in the last 6 months, its not showing any signs of slowing. Its called Stagflation.

Ambrose
Your remarks about Steinbeck brings me back to august 2008 when I visited Monterey,California where all the sardine factories were closed down and all the rainjackets for sale were made in China.I wonder what John Steinbeck would say about that now.On the way home I visited Wall St where the dutch traders built a wall to keep the english out.
Ambrose,Can you see a comparison today with the Great Depression of 1873 to 1896 when Hetty Green made a fortune on Wall St
Michael Mcmahon,Navan,Ireland

Sound market economics is always built on a sound means of exchange (money). If the currency is continually being devalued the market will be distorted by violent booms and busts. The only cure for a devalued currency created boom is the bust. The American Federal Reserve has only one unimaginative cure - - print money. Sound money is such an archaic idea to the Fed, that we are doomed to continual bubbles and busts. The sooner Keynes is allowed to die or be sentenced to a purgatory of reading Von Mises, the sooner our Western Civilization will discover the blessings of sound money and honest economics.

@ G.
on January 11, 2010
at 06:02 AM

Very good post, except you seem to think that Obama is different. He has been selected by the same elite that's selected previous presidents. Obama is singing off the same hymn sheet as Bush with only slight differences.

People think the Democrats and Republicans are so different and they have a choice, but both parties have been brought off. America is a one party state with two different factions.

So, no end to QE yet then! The banksters will continue to pile into the stock market with this free new money...footsie at 10k by the end of the year?

If America today is another Roman Empire in decline...soon the legions will be returning home to see what can be salvaged.
Now thats a real revolution. Someday Americans may question deploying a million military personnel overseas...to protect what? Apple? Disney? Florida oranges? Hollywood?
Hollywood should make a blockbuster movie to celebrate the occasion:
The Reunification of America: The homecoming.

It would appear changing captains of SS Britain is now totally irrelevant. No leader can walk on water unless they are on some ego-trip on drugs. We are currently stuck on an iceberg that Gorsky Bronsky told us was a save haven. RBS is now a government department that cost more than the NHS...if thats possible. And still he smiles like a cheshire cat! Meanwhile the mice are laughing in the cayman islands....with all our money.

It all comes down to the Irish logic of " If I were you trying to get there I would not start from here " . There never was a truer statement of pure logic and unadulerated truth .

What has got us "here" is the idea that a bunch of "experts" know so very much about the economy that they are entrusted with its management through a single tool - interest rates . The day-to-day experience of individuals is completely ignored under this system of fiat money and these people are not heard until they eventually snap and make themselves heard .

Engineers ,in their daily work go to great lengths to ensure that their products are measured accurately . Contrast this with the standards of economics , where the measuring instruments are made of rubber and elastic . No wonder the machine does not work .


Yours

Whiplash

Phew at least we are in the EURO so we don't need to worry about all this. No, wait a minute. We aren't thanks to Ambrose' enthusiasm for America!

Woo hoo another shot in the foot eh?

And yet the FTSE powers on this morning, buoyed by the latest state-sponsored, debt-fuelled binge in China, believing this is a harbinger of a return to the times of milk and honey...

It's just another debt bubble.

Strange times in our 'free market system'; state funded stockmarket recovery.

Ten thousand families a day losing their homes in the USA is a truly frightening number.

Statistics in the UK suggest 6% of people have had to use credit cards in order to pay mortgages or rent.

And yet the push to return to debt-based consumerism continues, and high real estate prices are still apparently a good thing...

What a truly 'bankrupt ideology'.

More fool those who buy - or should I say borrow - into it.

"Europe is even worse" claims Ambrose from his vantage point. At least the euro has erected some barrier against the speculators that thrive like flies in this environment. The single most important question is what happens if most of the regional banks in North America go upside-down and commercial real estate follows suit. Has our new pure instant raw form of capitalism (blessed by offshore hedge funds acting as predators)delivered its final blow of unintended consequences that 10 percent own everything and 90 percent just make do with stale crumbs from their overflowing table?

The Great Recession (that started in 1929) finished with the World War 2 (in 1939). We do not know where this recession will lead us. If you want to know how serious the current crisis is (and how far we are from REAL recovery) READ:

"The largest heist in history" -

http://gregpytel.blogspot.com/2009/04/largest-heist-in-history.html

No joke by any standard, and not for fainthearted.

At least America's got Ron Paul.
Combine this with the Euro Zone's problems and we do live in interesting times.

What was the manufacturing capacity use in Zimbabwe when they tried to print their way out of trouble, 5% ?
There may be deflation for those who do not eat or use no energy.
Economists and politicians are similar, half say black and half say white ergo 50% are wrong all the time.
In fact the answer is probably grey, so I suspect the stupidity of humans will endure.

The US dollar is in grave danger of losing its status as the global reserve currency.
The first requirement of such a reserve currency is stability. The US certainly hasn't got that. The US economic system is rotten to the core.

The jibe of a US Treasury Secretary, John Connally that "It's our currency, but it's your problem" was never more apt.

The extraordinary defence of the dollar's global reserve status by the CEO of Google (DT 9 Jan "Google boss warns UK over debt mountain") only serves to highlight the pressures the US is feeling to abandon the dollar's reserve currency status.

Apparently Guido Romero 6.09am is blissfully unaware that the Gulf states are already making moves away from the dollar, and there have been some ominous statements about the dollar coming from China.

Connally's remark only highlights the indifference with which America views its beggar they neighbour dollar decline.

It only takes oil and commodity contracts to be negotiated in a currency or currencies other than the dollar for the bubble of the dollar's magical reserve status to burst.

The Emperor has no clothes!

Unfortunately the news in the US will never get past the surface and report things like hidden unemployment and option ARM contracts, especially broadcast media. But plenty of time for Oprah's move to cable.

If, as I believe, AEP paints a truer picture than the MSM then there will be severe social and political consequences flowing from this that we have still to comprehend. My guess, for what its worth, is that there will be a huge anti incumbent vote in November (that's conventional wisdom) but it will be followed by increasingly radical and protectionist policies in 2011-12 with as yet unfathomable consequences on the 2012 Presidential electiion.

As the Chinese curse goes: may you live in interesting times!

Ambrose, what has happened to you? For months you have been harping on about how strong the USA is and how it will come out of this depression early. For months I have disagreed with you.

The statistics are appalling from the USA. Govt and private debt is truely astonomical. The banks are hiding massive home/property loan losses by not foreclosing. The banks are basically insolvent. The Obamie forecasts of GDP growth of over 4% average for the next four years are a joke. When interest rates rise it will hammer the debt repyaments on the debt. Unemployment is huge. One major reason why the unemployment level is not even worse is that the 'stastics' show a falling number of total people available for work in the USA. This has been at least 100K short for the over 6 months. It is known that the US workforce is growing by 100K a month and yet the number of people available for work is reportred as falling!

The stockmarket will eventually crash. The world situation is slowly getting worse and worse and I just wait for China to implode.

to Chelyabinsk

I am not at all sure that pricing oil or anything in a basket of currencies can be a solution.

The US$ is the reserve currency of all sovereign currencies in a floating exchange rate fiat monetary system.

Thus, for as long as inflation can be induced into the monetary system, then the floating exchange rate concept works.

If inflation should abate or, God forbid, reverse, all currencies implode regardless of whether it is the Dollar or the Euro or the Yen.

The thing is that inflation cannot be infinite because it is constrained by the finiteness (can you say that?) of the underlying economy. Ergo, it is constrained by the ability of underlying economic actors to service debt.

At a time when the credit markets are contracting globally (not withstanding the suspension of mark to market rules in favor of a chosen few in an attempt at waiting the crisis out) global currencies are at risk. This is borne out by the trend of the last few years as evident in the charts on page 3 at this link:

http://www.stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3585763

The curious point is trying to find the answers in market behaviour that is not consistent with openly available information. The first of the usual suspects is that the US government is again covertly manipulating the market, and may try to stave off the other half of the "W" until after November.

That the printing presses haven't slowed while M3 is contracting would support this notion, perhaps. But who is buying the paper as the Chinese are becoming more and more wary of owning another large piece of uncontrollable real estate, eh?

On the political side, the curiously named Universal Voter Registration Bill coming up later this month certainly appears to show that the governing political party intends to keep it that way, by hook or by crook, so to speak. There are elements in this legislation that smack of the Weimar Republic takeover in Germany some 80 years ago.

That puts a whole new spin on the dimensions in play in the US.

Irish American's tithing even 1%? That's a new factoid for this I-A grandchild of the depression. Or should I have read the statement to be about I-A cops?
But otherwise another sobering column by AEP. This feels much like the 14 months of the credit crunch when no one in the media or on the streets seemed to comprehend the gravity of the situation. They act like something was fixed last year and the storm has passed. Maybe something was "fixed", but not in the sense of corrected.
I've been waiting for well over a decade for Americans to wake up, and wondering what it would take to do that. I'm starting to wonder if my sleepwalking countrymen are just brain dead.

------------------------------------

Ambrose- Another excellent article and I quote my British mother when I say "Spot On." It seems you British know more about America's problems then we Americans do.

However, I might know why my fellow Americans seem so blind to the obvious political & economic realities stated in your excellent column. It seems Americans like "vegetating" while the Elites chosen US Government officials, media moguls and pundits lead us down the garden path and pick our pockets. You see Americans "were" so obsessed with self gratification and acquiring more toys they couldn't think outside of the "media generated box" they live in and do not understand the simple concept of logic based thought.

This lack of critical thinking, call it Blind Ignorance, is the American way to avoid truths that hurt and if believed won't allow "their political side" to win. It's much easier for them to believe political & Wall Street lies, phony government statistics, propaganda in TV commercials, media whores, and bully pulpit prolife preachers, radical Neoconservatives or the neighbors email as it just takes a few minutes to grasp a deceitful point of view... and then promote it. It's troublesome to look for truths, read, study, ask questions and "think." Logic based thought processes are foreign to these people as they've been dumb down by the Elite controlled US media.

Unfortunately all Americans, the British and rest of the World have paid a heck of a price for those Americans too lazy to do their homework... that helped elect Bush... "Twice" and who lay blame for the poor performance of the American Economy on Obama's 11 month stint in office. They won't acknowledge that during 8 years of Bush's Neoconservative Republican reign Americans sacrificed many Freedoms and their Democracy as the Bush Administration brought America "Corporatism" and the World a "derivative" generated Depression. For those Americans whom continue to remain blindly ignorant of all truths it should be noted Corporatism started in America when Bush allowed the Neoconservative & Elites, "Goldman Sachs," banks, investment banks and other corporations to run the US Government. The current Bush created Depression has changed the economies dynamics as retail purchases continue their decline... along with jobs, house prices, wages, benefits and Americans trust in their government. It seems 17.4% of Americans have been left on the side of the road holding the empty bag.

It should be noted that Wall Street and its "derivatives" are nothing more than gambling. Wall Street is a giant Casino with government sanctioned gaming and commodity trading that recapitalizes the big banks at the expense of average Americans. It's rigged so the house (Goldman Sachs, JP Morgan, Citigroup, Wells Fargo etc.) always wins. The scary thing is... both the American and European economies are based upon this same phony gaming scheme. That extorts money from citizens of the World via gross lies about markets, stocks, derivatives, bank profits & capital, business growth & profits and World GDP's.

Wall Street and the Worlds big banks should be allowed to fail... as failure is a learning experience that won't soon be forgotten. The executives at Goldman Sachs, JP Morgan, Citigroup, Wells Fargo and other World Banks should be allowed to join Americans lucky enough to have Medicaid, the unemployed at food banks, soup kitchens, food stamp lines and shelters for the homeless. Let former Wall Street Executives join their fellow unemployed Americans as they shop for the new health insurance with empty pockets and broken souls.

Solutions; Obama during his campaign “promised” Americans single payer health insurance... where is it? Where are the work programs? Obama needs to clean house starting with corporatists such as Geithner, Summers, Robert Rubin, son Jamie Rubin & his hires, Bernanke and many other individuals. Paul Volker should be brought in to clean up this mess as his track record is impeccable and clearly indicates where his loyalties lie. Obama should bring in people that have no ties to Wall Street Casino's or the "big" banks. Obama needs to stand tall and prosecute Bush & Cheney Administration for war crimes, lies, questionable military contracts, miss appropriated and misplaced funds. The clock is ticking and Obama must act soon as Americans are growing restless.

This World Depression will end when the American rebellion starts. When "real" Americans have the gonads to do what's right. To "think" and fight for freedoms politically as their forefathers did. To take control of "their" Government from the Neoconservatives and Elites who trashed the American Constitution, Bill of Rights, Democracy and while doing so... destroyed the economy of the World.

Some true patriots will remember this line... "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

So I ask... "Where have all the real Americans gone?"

John Wayne... the "Duke"... where are you when America needs you?

-----------------------------------

The U.S. is already in a Depression the Government does want to tell the Population for fear of Panic. As 2010 rolls forward, the more the US government talks about winding down stimulus packages, capping budget deficits and even starting on the process of actually raising interest rates, the more desperately they will be borrowing and spending to keep a semblance of "normalcy" in front of their ever more nervous populace. It's only a matter of time before the Bubble Pops in 2010 !

When economies are based upon consumption, giving the reins to appetite is dangerous, risky, even
iniquitous.

Ambrose, you are right, it is time
to tear up the old text books.

I am relieved to hear the US economic recovery is strongly underway!

Thanks Ambrose, also for the interesting note on "how it ended between 1932 and 1934".

The idea that a house bought with little or nothing down in the past 4 or 5 years ( often with the expectation one could 'flip' it for a profit) is somehow the 'family farm' is where AEP and Obama has it wrong.

Getting foreclosed on an underwater mortgage isn't a tragedy, it is a blessing. The former 'loanowner' is set free from the debt and can rent an equivalent home for much less.

That said, we are well and truly screwed here in the US and Denninger's Market-Ticker, as mentioned by another, explains it clearly.

Another data point is not just the unemployment level but the 26 week data - data on those who have been unemployed for 26 weeks or more. It's showing a real "hockey stick" effect.

The average length of unemployment has now reached 24 weeks and the rate of exhaustion of regular unemployment payments has reached 45%. That's when an unemployed worker makes the transition to emergency unemployment payments.

In December, the unemployment Bill reached $14.7bn, which is just over the total salary bill for the Federal Government.

But in a sense, this is just setting the scene. Unemployment is still rising because companies are cutting back on borrowing and investment. Unemployment is rising sharply among less skilled workers because construction and building are in a slump. And as the year wears on, the Banks will be hit by a wave of Commercial Real Estate loan defaults - one reason they are cutting back on lending. This will affect the small and regional Banks the worst.

Meanwhile, interest rate cuts are having the paradoxical effect of pushing money into the Bond Market and to a lesser extent into the Stock Market. Also China is busily creating a new asset bubble in minerals and commodities, with increased imports.

In the Thirties, the Depression tended to spiral around the World as one country suffered a crisis, then another, then another. After Dubai, the next place to look for trouble may be China. They also have a real estate bubble, but it is not the kind we are familiar with. In China people are simply buying houses and apartments as inflation hedges. They don't need to live in them, necessarily, because they believe they will eventually be worth more than cash. I guess time will tell.

AEP is beginning to make Jeremiah sound like an optimist. Will the American depression kick in before or after the run on the pound, the collapse of the Euro and the Japanese default?

Jeff - You can't have LIBOR spike if there is no demand to borrow money between commercial banks. Why would you borrow from another bank when central banks are giving cash away free?

For confirmation just visit Karl Denninger at http://market-ticker.denninger.net/archives/1835-A-Macro-Level-Look-At-The-Economy.html

The data coming out of the US is truly alarming. AEP is to be commended for his research and frank admission of the truth about the US economy. The social and political consequences for the US are likely to be profound.

The question is what effect is this likely to have on the global economy if the dollar nosedives?

The problem is that commodities especially oil are priced in dollars. A significant weakening in the dollar would cause global inflation to rocket.

Crisis meetings of the G20 are likely to be held to price commodities in a basket of currencies, in a move away from the dollar.

It seems that the period of the phoney war of goverments buying their own debt, as in the UK, is over. The blitzkreig of cuts is about to begin.

The challenge for politicians will be to hold together the social order.

I wonder if RealtyTrac's numbers are that accurate. There are a lot more repossessions at Credit Unions they don't take into account. http://www.repofinder.com tracks a lo of the smaller banks and credit union's numbers too. Any way you slice it America is in a world of hurt.

It's so refreshing that the Community Organizer in Chief can have us all share the pain.
All except Geitner and his buds of course.

It's so refreshing that the Community Organizer in Chief can have us all share the pain.
All except Geitner and his buds of course.

And now for the really bad news.
Thank you AEP for really spoiling my Sunday rest.

So Ambrose. Not disagreeing at all with eloquence. Just wondering where you get your (estimated) M3 numbers. A 5% decline is shiveringly scary.

And why is LIBOR-OIS not flaring?

2010 is an election year. Both political parties support the policy of saddling the prudent and the savers and the taxpayers with the losses incurred by the greed of profligate speculators.

"Homeowners" who are underwater speculated on continuously rising home prices. Wall Street banks speculated with 40:1 to 80:1 leverage and while the going was good with rising asset markets made a killing which they kept knowing when their bets soured their bought and paid for politicians would transfer those losses to the prudent and taxpayers.

Now ostensibly to "save" homeowners and to prevent the next "Great Depression" taxpayers will wind up taking principal losses on mortgages so that these homeowners can keep their homes with lowered mortgage principal and as a result keep home prices elevated. While the prudent who had saved real money from income can't afford to buy high priced homes nor gain any return with ZIRP.

So the next time everyone will leverage and speculate and expect to be bailed out once again. Until the system blows up for sure.

If money printing and deficits were the panacea Zimbabwe would be the richest country on the planet.

Grapes Of Wrath - The Remake

The true crims - the banks - were well and trully nailed in the book and film, when the cats (caterpillars) rolled over the farms that were taken by the banks.

The very dirt beneath their feet, the soil that they worked and that their ancestors worked were buried in was being taken by the sneaky bankers. Was this the plot all along?

This is as predicted by the Founders of the US. They had warned that if these snakes (moneylenders) ever got a hold then they would eventually steal the very ground beneath their feet.

The true revolution that needs to happen to free the whole world is a revolution against the big banks. Central banking is the scam that has perverted the whole course of human destiny on this planet. We get rid of them and take the pain then we have a bright future. If not then the next implosion will be on a scale unimagined.

The banksters truest enemy is an educated individual, someone who has read Mises and walks around with their eyes wide open.

Banksters are arming themselves with guns and plane tickets, not guns and gold. There may be some hope.

John Ryskamp

Can you expand on your book. What "bigger" changes do you think we can expect?

What Ambrose doesn't understand is that we are moving out of the "scrutiny" regime of West Coast Hotel ("minimum" scrutiny is what allows housing evictions) and into the "maintenance" regime, the doctrine of which is that the law maintains important facts. Housing is an important fact. Therefore, we are in a transition to a complete ban on housing evictions.

This is actually coming from our terrified American homeowners, who, though they are semifascist, don't want to practice their semifascism sitting out the curb outside the house from which they have been removed.

I studied this little phenom in my book The Eminent Domain Revolt.

Look for even bigger changes in America than you EVER imagined.